AMENDED AND RESTATED
CREDIT AGREEMENT
Dated January 18, 2000
among
AMRESCO, INC.
and its Subsidiaries
as Borrowers on Schedule 1
as Borrowers
BANK OF AMERICA, N.A.
as Administrative Agent
and
CERTAIN FINANCIAL INSTITUTIONS AND FUNDS
as Lenders
as arranged by
BANC OF AMERICA SECURITIES LLC
as Lead Arranger
TABLE OF CONTENTS
ARTICLE I 2
DEFINITIONS 2
Section 1.1. Definitions. 2
Section 1.2. Singular and Plural of Definitions 27
Section 1.3. Substantive Definitions 27
Section 1.4. Money 27
Section 1.5. Captions; References 27
Section 1.6. Accounting Terms and Determinations 27
ARTICLE II 27
THE CREDIT FACILITIES 27
Section 2.1. Commitments 27
Section 2.2. Required Payments; Termination 31
Section 2.3. Ratable Loans. 34
Section 2.4. INTENTIONALLY OMITTED. 34
Section 2.5. Commitment Fee; Facility Letter of Credit
Fees; Facility FX Fees. 34
Section 2.6. Minimum Amount of Each Advance. 35
Section 2.7. Optional Principal Payments; Allocation of Payments. 35
Section 2.8. Method of Borrowing. 35
Section 2.9. INTENTIONALLY OMITTED. 36
Section 2.10. INTENTIONALLY OMITTED 36
Section 2.11. Interest Rate. 36
Section 2.12. Rates Applicable After Default. 36
Section 2.13. Method of Payment. 36
Section 2.14. Continuation of Contract. 36
Section 2.15. Evidence of Indebtedness. 36
Section 2.16. Method of Issuing Facility Letters of Credit. 37
Section 2.17. Reductions to Revolving Commitment. 38
Section 2.18. Telephonic Notices. 39
Section 2.19. Interest Payment Dates. 39
Section 2.20. Calculation of Interest and Fees. 39
Section 2.21. Notification of Advances, Interest Rates,
Prepayments and Commitment Reductions. 39
Section 2.22. Lending Installations. 39
Section 2.23. Non-Receipt of Funds by the Administrative Agent. 40
Section 2.24. INTENTIONALLY OMITTED. 40
Section 2.25. Judgment Currency. 40
ARTICLE III 41
YIELD PROTECTION; TAXES 41
Section 3.1. INTENTIONALLY OMITTED. 41
Section 3.2. Changes in Capital Adequacy Regulations. 41
Section 3.3. INTENTIONALLY OMITTED. 41
Section 3.4. INTENTIONALLY OMITTED. 41
Section 3.5. Taxes. 41
Section 3.6. Lender Statements; Survival of Indemnity. 43
Section 3.7. INTENTIONALLY OMITTED. 43
ARTICLE IV 43
CONDITIONS PRECEDENT 43
Section 4.1. Closing. 43
Section 4.2. Conditions To All Advances. 46
Section 4.3. Conditions to Letters of Credit 46
ARTICLE V 47
COLLATERAL 47
Section 5.1. Security and Guaranties. 47
Section 5.2. Requirements For Assigned Loans. 49
Section 5.3. Requirements for Mortgaged Properties. 49
Section 5.4. Recording. 50
Section 5.5. Administrative Agent's Discretion. 50
Section 5.6. Lockbox; Lockbox Accounts; Other Accounts. 50
Section 5.7. Releases of Collateral. 52
Section 5.8. Deposit of Cash Collateral for Facility
Letters of Credit. 53
ARTICLE VI 54
REPRESENTATIONS AND WARRANTIES 54
Section 6.1. Existence and Standing. 54
Section 6.2. Authorization and Validity. 54
Section 6.3. No Conflict; Government Consent. 54
Section 6.4. Financial Statements. 55
Section 6.5. Material Adverse Change. 55
Section 6.6. Taxes. 55
Section 6.7. Litigation and Contingent Obligations. 55
Section 6.8. Subsidiaries. 55
Section 6.9. ERISA. 56
Section 6.10. Accuracy of Information. 56
Section 6.11. Purpose of Credit; Regulation U. 56
Section 6.12. Material Agreements. 56
Section 6.13. Compliance With Laws. 56
Section 6.14. Ownership of Properties. 56
Section 6.15. Plan Assets; Prohibited Transactions. 57
Section 6.16. Environmental Matters. 57
Section 6.17. Investment Company; Investment Advisor. 57
Section 6.18. Public Utility Holding Company Act. 57
Section 6.19. Year 2000. 57
Section 6.20. Subordinated Indebtedness; Other Indebtedness. 58
Section 6.21. Insurance. 58
Section 6.22. Solvency. 58
Section 6.23. Lend Lease Agreement. 58
Section 6.24. Licenses. 59
Section 6.25. Servicing Rights. 59
ARTICLE VII 59
COVENANTS 59
Section 7.1. Financial Reporting. 59
Section 7.2. Use of Proceeds. 61
Section 7.3. Notice of Default and Material Matters. 61
Section 7.4. Conduct of Business. 62
Section 7.5. Taxes. 62
Section 7.6. Insurance. 62
Section 7.7. Compliance with Laws. 62
Section 7.8. Maintenance of Properties. 62
Section 7.9. Inspection. 62
Section 7.10. Dividends; Purchase of Stock. 63
Section 7.11. Indebtedness. 63
Section 7.12. Mergers and Consolidations. 63
Section 7.13. Sale of Assets. 64
Section 7.14. Investments and Acquisitions. 64
Section 7.15. Liens. 65
Section 7.16. Year 2000. 67
Section 7.17. Affiliates. 67
Section 7.18. Subordinated Indebtedness. 67
Section 7.19. Lend Lease Agreement. 67
Section 7.20. Servicing Agreement. 67
Section 7.21. Contingent Obligations. 68
Section 7.22. INTENTIONALLY OMITTED. 68
Section 7.23. Maintenance of Corporate Existence. 68
Section 7.24. Financial Covenants. 68
Section 7.25. Investment Company. 69
Section 7.26. Exceptions to Covenants. 69
ARTICLE VIII 69
DEFAULTS AND REMEDIES 69
Section 8.1. Events of Default. 69
Section 8.2. Remedies 72
Section 8.3. Rights of Set-Off 73
Section 8.4. Remedies Cumulative, Concurrent and Non-Exclusive 74
Section 8.5. No Conditions Precedent to Exercise Remedies 74
Section 8.6. Release of and Resort to Collateral 75
Section 8.7. Waivers 75
Section 8.8. Discontinuance of Proceedings 75
Section 8.9. Power of Attorney 75
Section 8.10. Application of Proceeds 76
ARTICLE IX 76
THE ADMINISTRATIVE AGENT 76
Section 9.1. Appointment; Nature of Relationship. 76
Section 9.2. Powers. 76
Section 9.3. General Immunity. 77
Section 9.4. No Responsibility for Loans, Recitals, etc. 77
Section 9.5. Action on Instructions of Lenders. 77
Section 9.6. Employment of Agents and Counsel. 77
Section 9.7. Reliance on Documents; Counsel. 78
Section 9.8. Administrative Agent's Reimbursement and
Indemnification. 78
Section 9.9. Notice of Default. 78
Section 9.10. Rights as a Lender. 78
Section 9.11. Lender Credit Decision. 79
Section 9.12. Successor Administrative Agent. 79
Section 9.13. Administrative Agent's Fee. 79
Section 9.14. Delegation to Affiliates. 79
Section 9.15. Execution of Security Documents. 80
Section 9.16. Collateral Releases; Lender Consents; Amendments, etc. 80
Section 9.17. Co-Agents and Arrangers. 80
Section 9.18. Ratable Payments. 80
Section 9.19. Proceeds of Collateral. 80
Section 9.20. Non-Advancing Lenders. 81
ARTICLE X 82
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS 82
Section 10.1. Successors and Assigns. 82
Section 10.2. Participations. 82
Section 10.3. Assignments. 83
Section 10.4. Dissemination of Information. 84
Section 10.5. Tax Treatment. 84
Section 10.6. Federal Reserve Bank. 84
ARTICLE XI 84
GENERAL PROVISIONS 84
Section 11.1. Survival of Representations. 84
Section 11.2. Notices. 84
Section 11.3. Amendments; Lender Votes and Consents. 85
Section 11.4. Governmental Regulations. 86
Section 11.5. Several Obligations; Benefits of this Agreement. 86
Section 11.6. Expenses; Indemnification. 86
Section 11.7. Usury Savings Clause 87
Section 11.8. Accounting. 88
Section 11.9. Severability of Provisions. 88
Section 11.10. Nonliability of Lenders. 88
Section 11.11. Confidentiality; Non-Solicitation. 89
Section 11.12. Nonreliance. 89
Section 11.13. Disclosure. 89
Section 11.14. Compliance With Credit and Underwriting Policies. 90
Section 11.15. Appraisals. 90
Section 11.16. Senior Indebtedness; Borrowers Subordination. 90
Section 11.17. Consolidated Group. 90
Section 11.18. Amendment, Renewal and Extension. 91
Section 11.19. Prior Understandings; No Defenses; Entire
Agreement; No Oral Agreement 91
Section 11.20. Release of Claims. 91
Section 11.21. Construction 91
Section 11.22. Joint and Several Obligations 91
Section 11.23. Counterparts. 92
ARTICLE XII 92
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL 92
Section 12.1. CHOICE OF LAW. 92
Section 12.2. CONSENT TO JURISDICTION. 92
Section 12.3. WAIVER OF JURY TRIAL. 92
Schedules and Exhibits
Schedule 1 - Lenders, Borrowers and Guarantors
Schedule 2 - Commitment Schedule
Schedule 3 - Lending Installations
Schedule 4 - INTENTIONALLY OMITTED
Schedule 5 - Pricing Schedule
Schedule 6 - Excluded Subsidiaries
Schedule 7 - Subsidiaries - Continuing Operations/Discontinued
Operations
Schedule 8 - Existing Indebtedness and Liens
Schedule 9-A - Existing Investments
Schedule 9-B - Foreign Subsidiary and Other Inter-Company Notes
Schedule 10 - Pre-Transition Date Credit Facilities Borrowing Base
Schedule 11 - Post-Transition Date Revolving Credit
Facility Borrowing Base
Schedule 12 - Post-Transition Date Term Loan Facilities
Borrowing Base
Schedule 13 - Managed Asset Portfolios
Schedule 14 - Structured Real Estate Portfolio and
Unfunded Commitments
Schedule 15 - Custodial Agreements
Schedule 16 - Mortgaged Properties; Recordation
Exhibit A - Form of Borrowing Notice
Exhibit B - Form of Compliance Certificate
Exhibit C - Form of Assignment and Acceptance Agreement
Exhibit D-1 - Form of Revolving Note
Exhibit D-2 - Form of Term Loan A Note
Exhibit D-3 - Form of Term Loan B Note
Exhibit D-4 - Form of Swingline Note
AMENDED AND RESTATED CREDIT AGREEMENT
This Amended and Restated Credit Agreement, dated as of the
18th day of January, 2000, is entered into by and among AMRESCO,
INC., a Delaware corporation (together with its successors,
"AMRESCO"), the other entities identified as Borrowers on
Schedule 1, as amended and supplemented from time to time
(together with AMRESCO, collectively referred to herein as the
"Borrowers", and each such entity referred to herein as a
"Borrower"), BANK OF AMERICA, N.A., formerly NationsBank, N.A.
(together with its successors or assigns, "Bank of America"), in
its capacity as administrative agent, and the LENDERS (as herein
defined).
R E C I T A L S :
I. AMRESCO, Administrative Agent (as hereinafter defined)
and the Lenders have previously entered into that certain Credit
Agreement (as heretofore amended, modified, and supplemented, the
"Existing Credit Agreement") dated as of August 12, 1998,
pursuant to which the Lenders agreed to make available to AMRESCO
various loans and credit facilities upon the terms and conditions
therein contained (the "Existing Credit Facilities"). The
Existing Credit Agreement has been previously (a) modified and
amended pursuant to (i) First Modification of Credit Agreement
dated as of September 17, 1998, (ii) Second Modification of
Credit Agreement dated as of November 30, 1998, (iii) Third
Modification of Credit Agreement and Consent dated as of
February 28, 1999, (iv) Fourth Modification of Credit Agreement
and Consent dated as of August 12, 1999, (v) Fifth Modification
of Credit Agreement dated as of September 29, 1999, as modified
by Extension Agreement dated as of November 15, 1999, (vi) Sixth
Modification of Credit Agreement dated as of November 26, 1999,
and (vii) Seventh Modification of Credit Agreement dated as of
December 30, 1999, and (b) supplemented by (i) Supplement I to
Loan Documents dated as of February 28, 1999, (ii) Supplement II
to Loan Documents dated as of May 31, 1999, (iii) Supplement III
to Loan Documents dated as of November 15, 1999
("Supplement III"), and (iv) Supplement IV to Loan Documents
dated as of November 30, 1999 (individually a "Supplement" and
collectively, the "Supplements").
II. Payment and performance of the indebtedness and
obligations under the Existing Credit Agreement are guaranteed by
certain Subsidiaries of AMRESCO pursuant to that certain Guaranty
Agreement (the "Existing Guaranty") executed by such Subsidiaries
(each such Subsidiary party to the Existing Guaranty by execution
thereof or a Supplement thereto being referred to herein as an
"Existing Guarantor") in favor of Administrative Agent and the
Lenders. The Existing Guaranty has been supplemented to add
additional Existing Guarantors thereunder, in accordance with the
terms of the Existing Credit Agreement and the Existing Guaranty,
pursuant to the four (4) Supplements described in preceding
Recital I. Prior to execution of the Existing Guaranty, each
Existing Guarantor determined, and by its execution of this
Agreement each Existing Guarantor hereby represents to
Administrative Agent and the Lenders, that the execution of the
Existing Guaranty was reasonably expected to benefit, directly or
indirectly, such Existing Guarantor.
III. Each Existing Guarantor (other than any Existing
Guarantor that is prohibited by law or agreement from becoming a
borrower hereunder or as otherwise provided herein) desires to
become a co-borrower with AMRESCO under the Existing Credit
Facilities. Additionally, the Borrowers have requested certain
modifications and amendments to, and consents under, the Existing
Credit Agreement. The Borrowers, Administrative Agent and the
Lenders desire to execute this Agreement to amend and restate the
Existing Credit Agreement to effect the change to co-borrower
status and certain other changes to the Existing Credit
Agreement. Accordingly, in consideration of the mutual covenants
and agreements contained herein, and other good and valuable
consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. The following terms, as used
in this Agreement, have the respective following meanings:
"Account Assignment" means an assignment and pledge of a
deposit account or other escrowed or pledged funds of AMRESCO or
any other Borrower or any Guarantor required or provided for
hereunder, including without limitation pursuant to
Sections 2.1(b), 2.2.1(b), 5.6 or 5.8, executed by AMRESCO and
any other applicable Borrower or any applicable Guarantor, in
favor of Administrative Agent, for the benefit of the Lenders, in
form and substance acceptable to Administrative Agent, as
amended, supplemented or restated from time to time.
"Account Debtors" means, collectively, the "borrower" and
each other obligor, guarantor or other liable party under any of
the Assigned Loans.
"Acquisition" means any transaction, or any series of
related transactions, consummated on or after the date of this
Agreement, by which AMRESCO or any Subsidiary (i) acquires any
going business or all or substantially all of the assets of any
firm, corporation, partnership or limited liability company, or
division thereof, whether through purchase of assets, merger or
otherwise or (ii) directly or indirectly acquires (in one
transaction or as the most recent transaction in a series of
transactions) at least a majority (in number of votes) of the
securities of a corporation which have ordinary voting power for
the election of directors (other than securities having such
power only by reason of the happening of a contingency) or a
majority (by percentage or voting power) of the outstanding
ownership interests of a partnership or limited liability
company.
"Administrative Agent" means Bank of America in its capacity
as contractual representative of the Lenders pursuant to
Article IX, and not in its individual capacity as a Lender, and
any successor Administrative Agent appointed pursuant to Article
IX.
"Advance" means a borrowing under the Revolving Credit
Facility made by the Revolving Lenders on the same Borrowing
Date.
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control
with such Person. A Person shall be deemed to control another
Person if the controlling Person possesses, directly or
indirectly, the power to direct or cause the direction of the
management or policies of the controlled Person, whether through
ownership of stock, by contract or otherwise.
"Aggregate Commitment" means, on any date of determination,
the aggregate of (i) the Commitment Amounts of all of the
Revolving Lenders with respect to the Revolving Credit Facility,
as reduced from time to time pursuant to the terms hereof,
including without limitation Section 2.17, (ii) the outstanding
principal balance of Term Loan A, and (iii) the outstanding
principal balance of Term Loan B.
"Aggregate Loan Percentage" means, with respect to each
Lender, the fraction, expressed as a percentage, obtained by
dividing (a) the sum of, without duplication, (i) the aggregate
principal amount outstanding on the date of determination under
the Term Loan A Note, the Term Loan B Note, the Revolving Note
and/or the Swingline Note payable to such Lender, plus (ii) such
Lender's portion of the Facility Letter of Credit Exposure, the
Facility FX Exposure and Swingline Advances, divided by (b) the
aggregate principal amount outstanding on the date of
determination under all of the Notes plus the Facility Letter of
Credit Exposure and the Facility FX Exposure.
"Agreement" means this Amended and Restated Credit
Agreement, as it may be amended, modified, supplemented or
restated and in effect from time to time.
"Agreement Accounting Principles" means generally accepted
accounting principles as in effect from time to time, applied in
a manner consistent with that used in preparing the financial
statements referred to in Section 6.4; provided, however, that
wherever in this Agreement principles of consolidation different
from those required by generally accepted accounting principles
are specified, the principles of consolidation specified in this
Agreement shall govern.
"AMRESCO" is defined in the introductory paragraph of this
Agreement.
"Applicable Base Rate Margin" means, with respect to all
Loans outstanding at any time, the percentage rate per annum
which is the applicable increase over the Corporate Base Rate at
such time as set forth in the Pricing Schedule.
"Applicable Eurocurrency Rate Margin" means the percentage
rate per annum which is the applicable increase over the
Eurocurrency Reference Rate for purposes of calculating the
Eurocurrency Comparable Rate as set forth in the Pricing
Schedule.
"Applicable Fee Rate" means, at any time, the applicable per
annum percentage rate at which the Commitment Fee is accruing on
the unused portion of the Revolving Commitment (without any
reduction for Swingline Advances), and at which the Facility
Letter of Credit Fee and the Facility FX Fee are each calculated
at such time, as set forth respectively in the Pricing Schedule.
"Applicable Rate" means, for any day, with respect to the
principal balance of all Loans, a rate per annum equal to the
Floating Rate.
"Assigned Loans" means all loans or other evidence of
indebtedness owned or hereafter originated or acquired by any
Borrower or any Guarantor (except Foreign Subsidiary Guarantors,
other than AMRESCO Funding Canada Inc., and, subject to Section
5.1.4, SBA Guaranteed Loans of AMRESCO Independence Funding,
Inc.), which are not subject to Liens (permitted by Section 7.15)
securing Indebtedness other than the Loans.
"Article" means an article of this Agreement unless another
document is specifically referenced.
"Authorized Accounting Officer" means any of the Chief
Financial Officer, Chief Accounting Officer, Treasurer,
Controller or any Assistant Treasurer of AMRESCO.
"Authorized Officer" means as to any Borrower or any other
Person, any of its Chairman, Vice-Chairman, President, Executive
Vice President(s), Senior Vice President(s), Vice President(s),
Chief Financial Officer, Chief Accounting Officer, Treasurer or
Assistant Treasurer, who is duly authorized by the Board of
Directors of such Person to execute the Loan Documents or any
other documents or certificates to be executed by such Person
hereunder or in connection with any Advance or Facility Letter of
Credit.
"Balancing Payment" is defined in Section 2.7(b).
"Balancing Ratio" means, as of any time of determination,
the ratio of (a) the outstanding balance of Term Loan A as of
such time to (b) the sum of the Revolving Commitment, the
outstanding balance of Term Loan A, and the outstanding balance
of Term Loan B, each as of such time.
"Bank of America" is defined in the introductory paragraph
of this Agreement.
"Borrower" and "Borrowers" is defined in the introductory
paragraph of this Agreement. Use of the term "Borrower" or
"Borrowers" in this Agreement and all of the other Loan
Documents, unless the context requires otherwise, shall be deemed
to be a reference to each Borrower, and to all of them
collectively.
"Borrowing Base" means (a) prior to and on the Transition
Date, an amount calculated as provided in Schedule 10 with
respect to all the Credit Facilities, and (b) after the
Transition Date (i) an amount calculated as provided in
Schedule 11 with respect to the Revolving Credit Facility, and
(ii) an amount calculated as provided in Schedule 12 with respect
to the Term Loan Facilities. Any references to the Borrowing
Base as a limitation on or restriction or requirement with
respect to Advances, Swingline Advances, Facility Letters of
Credit, Facility Foreign Currency Exchange Agreements, or other
components of the Revolving Commitment or Revolving Credit
Facility shall, after the Transition Date, mean the amount
calculated pursuant to clause (b)(i) as the Borrowing Base with
respect to the Revolving Credit Facility.
"Borrowing Base Certificate" is defined in Section 7.1(ix).
"Borrowing Base Coverage Ratio" means the ratio of the
aggregate "Net Asset Values" of the eligible assets comprising
the respective "Borrowing Base" as shown in Schedule 10, 11 or
12, as applicable, to the amount shown as "Total Net
Outstandings" on the respective Schedule 10, 11 or 12.
"Borrowing Date" means a date on which an Advance is made
hereunder.
"Borrowing Notice" is defined in Section 2.8.
"Business Day" means (a) with respect to any obligations
arising under or payments required in connection with a Facility
Foreign Currency Exchange Agreement, a day (other than a Saturday
or Sunday) on which banks generally are open in Dallas, Texas and
New York, New York for the conduct of substantially all of their
commercial lending activities, interbank wire transfers can be
made on the Fedwire system and on which dealings in Dollars and
the other Eligible Currencies are carried on in the London
interbank market, and (b) for all other purposes, a day (other
than a Saturday or Sunday) on which Administrative Agent and
national banks generally are open in Dallas, Texas for the
conduct of substantially all of their commercial lending
activities.
"Capitalized Lease" of a Person means any lease of Property
by such Person as lessee which would be capitalized on a balance
sheet of such Person prepared in accordance with Agreement
Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount
of the obligations of such Person under Capitalized Leases which
would be shown as a liability on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"Capture Account" is defined in Section 5.6(b) by reference
to the Lockbox Agreement.
"Cash Equivalent Investments" means (a) short-term
obligations of, or fully guaranteed by, the United States of
America, (b) commercial paper rated A-1 or better by S&P or P-1
or better by ▇▇▇▇▇'▇, (c) demand deposit accounts maintained in
the ordinary course of business, (d) certificates of deposit
issued by and time deposits with commercial banks (whether
domestic or foreign) having capital and surplus in excess of
$100,000,000, and (e) overnight Eurodollar investments of funds
in accounts maintained with Administrative Agent; provided that,
in each case, unless the obligation can be settled daily at par
or the maturity is prior to the Revolving Credit Termination
Date, the same provides for payment of both principal and
interest (and not principal alone or interest alone) and is not
subject to any contingency regarding the payment of principal or
interest.
"Change Date" is defined in Section 7.24.1.
"Change in Control" means (a) the acquisition, in one or a
series of transactions, by any Person, or two or more Persons
acting in concert, of beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934) of 25% or more of the
outstanding shares of voting stock of AMRESCO, provided that the
booking of the issuance of stock to former shareholders of MIC or
the CLC Earnout Recipients in connection with the MIC Transaction
or the CLC Transaction, respectively, shall not constitute a
Change in Control hereunder so long as such stock is not issued
and the recipients thereof do not, as a result of such booking,
obtain any voting or other control rights with respect to such
stock; or (b) individuals who are directors of AMRESCO on the
date hereof shall cease to constitute 80% in number of the Board
of Directors of AMRESCO; or (c) at any time (i) prior to the Lend
Lease Closing Date (whether or not the Lend Lease Agreement is
terminated or such date does not occur) any one of the positions
of Chief Executive Officer, Chief Operating Officer and Chief
Financial Officer of AMRESCO is not filled by the person serving
in each such capacity on the date hereof, and (ii) after the Lend
Lease Closing Date, all three of such positions are not filled by
the persons serving in those capacities on the date hereof,
provided that if either such occurrence is due to the death or
disability of a person serving in any such capacity on the date
hereof, then such occurrence shall not be deemed a Change in
Control until the expiration of 30 days after the date of such
death or disability without the position left unoccupied by such
death or disability being filled by a person acceptable to
Administrative Agent.
"CLC Earnout Recipients" means, collectively, ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇▇▇.
"CLC Transaction" means the transaction providing for
"Earnout Payments" to the CLC Earnout Recipients described in
that certain Stock and Asset Purchase Agreement dated March 21,
1997, between (among others) AMRESCO and the CLC Earnout
Recipients, as amended prior to the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended,
reformed or otherwise modified from time to time.
"Collateral" means all collateral or security for the
Obligations subject to or governed by any of the Security
Documents or any other Loan Documents, as described generally in
Article V.
"Collateral Assignment" means, collectively, the Collateral
Assignment of Promissory Notes and Liens dated August 12, 1998,
executed by AMRESCO and the Existing Guarantors (except for the
Foreign Subsidiaries other than AMRESCO Funding Canada Inc.) in
connection with the Existing Credit Agreement, as amended by the
Supplements and further amended on the date hereof, and all other
collateral assignments, debentures, charges, and any other
documents or assignments of any kind assigning or creating Liens
on promissory notes or other evidences of indebtedness and
related Liens, executed by any one or more of the Borrowers
and/or the Guarantors in favor of Administrative Agent, on behalf
and for the benefit of the Lenders, as security for the
Obligations, which collateral assignments, debentures, charges or
other documents or assignments are intended to cover all of the
Assigned Loans, and all renewals, modifications, amendments,
supplements and restatements thereof.
"Commitment Amount" means, with respect to each Revolving
Lender, the amount indicated as such Revolving Lender's Revolving
Credit Facility Commitment Amount opposite its name on the
Commitment Schedule (Schedule 2), as such amount may from time to
time be (a) reduced as a result of a reduction in the Revolving
Commitment as provided herein, or (b) adjusted to account for any
assignment of a Revolving Lender's interest as provided in
Section 10.3.
"Commitment Fee" is defined in Section 2.5.1.
"Commitment Percentage" means, for each Revolving Lender,
the percentage of the Revolving Credit Facility such Revolving
Lender has committed to make available to the Borrowers as set
forth in the Commitment Schedule (Schedule 2) as such percentage
may be adjusted from time to time to account for any assignment
of a Revolving Lender's interest pursuant to Section 10.3.
"Commitment Schedule" means the Schedule attached hereto as
Schedule 2 and identified as such, as modified, supplemented,
restated or replaced from time to time, any such modifications,
supplements, restatements or replacements to reflect changes in
the Revolving Commitment or the Lenders' respective percentages
in the Credit Facilities to be effective when made by
Administrative Agent in its records, regardless of whether
Schedule 2 to this Agreement has been formally modified,
supplemented, restated and/or replaced.
"Consolidated EBITDA" means, for any period, determined in
accordance with Agreement Accounting Principles on a consolidated
basis for AMRESCO and its Subsidiaries, an amount equal to
(a) the sum of consolidated net income before taxes and
extraordinary gains or losses (as determined in accordance with
Agreement Accounting Principles), plus depreciation, plus
amortization, plus interest expense, each as deducted in
determining such consolidated net income before taxes, less
(b) write downs of retained interests in securitizations (which
includes, without limitation, interest only strips, servicing
rights and other similar assets) for prior years to the extent
prior year financial statements are restated in the period of
determination to reflect such write downs and such write downs
are not included in calculating net income for the period of
determination, and less (c) non-cash income (created by gain on
sale accounting) included in consolidated net income before taxes
and extraordinary gains or losses as used in clause (a) of this
calculation of Consolidated EBITDA; provided, however, that for
all purposes hereunder, (i) the losses related to the commercial
mortgage banking and home equity lending activities of AMRESCO
and its Subsidiaries (in an aggregate amount not to exceed
$220,500,000) that were reported in year-end 1998 financial
statements of AMRESCO shall not be included in calculating
Consolidated EBITDA, and (ii) the following amounts shall be
adjusted or added back in the calculation of Consolidated EBITDA
(but without duplication), provided that no matter how such
adjustments are made they shall be subject to the following
stated limitations: (A) write-downs of retained interests in
home equity securitizations up to a maximum amount of
$120,000,000; (B) the write-down of goodwill associated with the
acquisitions of the businesses that now consist of AMRESCO'S
Subsidiary ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. up to a maximum amount
of $20,000,000; (C) the write-down of goodwill associated with
MIC up to a maximum amount of $60,000,000; (D) the write-down of
goodwill associated with AMRESCO's home equity lending division
up to a maximum amount of $10,000,000; and (E) severance and one-
time restructuring charges taken by AMRESCO and its Subsidiaries
in an aggregate amount not to exceed $35,000,000; provided,
further, that the aggregate amount added back in the calculation
of Consolidated EBITDA under clauses (A) through (D) shall not
exceed $197,500,000.
"Consolidated Indebtedness" means at any time the
Indebtedness of AMRESCO and its Subsidiaries and any other Person
which would be reflected on the consolidated balance sheet of
AMRESCO and its Subsidiaries prepared in accordance with
Agreement Accounting Principles as of such time.
"Consolidated Interest Expense" means, with reference to any
period, the interest expense of AMRESCO and its Subsidiaries
calculated on a consolidated basis for such period as shown on
the consolidated financial statements of AMRESCO and its
Subsidiaries prepared in accordance with Agreement Accounting
Principles.
"Consolidated Net Income" means, with reference to any
period, the net income (or loss) of AMRESCO and its Subsidiaries
calculated on a consolidated basis for such period.
"Consolidated Net Worth" means, as of any date, the total
shareholders' equity (including capital stock, additional paid-in
capital and retained earnings after deducting treasury stock)
which would appear on a consolidated balance sheet of AMRESCO and
its Subsidiaries prepared as of such date in accordance with
Agreement Accounting Principles.
"Consolidated Tangible Net Worth" means, as of any date,
(a) Consolidated Net Worth, plus (b) the amount of any Permitted
Preferred Stock that is not added in as shareholders' equity in
the calculation of Consolidated Net Worth, less (c) the aggregate
book value of Intangible Assets of AMRESCO and its Subsidiaries
on a consolidated basis as of such date in accordance with
Agreement Accounting Principles, less (d) the aggregate
outstanding principal balances of the MIC Notes.
"Contingent Obligation" of a Person means any obligation,
contingent or otherwise, of such Person (a) directly or
indirectly guaranteeing any Indebtedness of any other Person and,
without limiting the generality of the foregoing, any obligation,
direct or indirect, contingent or otherwise, of such Person
(i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation
(whether arising by virtue of partnership arrangements, by
agreements to keep-well, to purchase assets, goods, securities or
services, to take-or-pay, or to maintain financial statement
conditions, by "comfort letter" or other similar undertaking of
support or otherwise), or (ii) entered into for the purpose of
assuring in any other manner the obligee of such Indebtedness or
other obligation of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part), or
(b) assuring any creditor or purchaser from such Person against
loss, including without limitation, any recourse obligation with
respect to loans or other receivables sold with recourse to such
Person, provided that the term Contingent Obligation shall not
include loan commitments or loan take-out agreements which are
typically issued by providers of long-term debt, or endorsements
for collection or deposit in the ordinary course of business.
"Continuing Operations" means the operations of the
Subsidiaries identified as "Continuing Operations Subsidiaries"
on Schedule 7.
"Contribution Agreement" means the Contribution and
Indemnity Agreement dated as of the date hereof executed by and
among AMRESCO and each Guarantor, and any other separate
Contribution and Indemnity Agreement that may be executed on or
after the date hereof among Guarantors, as amended, modified,
supplemented or restated.
"Controlled Group" means all members of a controlled group
of corporations or other business entities and all trades or
businesses (whether or not incorporated) under common control
which, together with AMRESCO or any of its Subsidiaries, are
treated as a single employer under Section 414 of the Code.
"Corporate Base Rate" means, on any date of determination,
the greater of (a) the rate of interest per annum most recently
announced by Administrative Agent as its prime rate in effect at
its principal office automatically fluctuating upward and
downward until and at the time specified in each such
announcement without special notice to AMRESCO, any other
Borrower or any other Person, which prime rate may not
necessarily represent the lowest or best rate actually charged to
a customer, it being understood and agreed that such rate is set
by Administrative Agent as a general reference rate of interest,
taking into account such factors as Administrative Agent may deem
appropriate, that it may not correspond with future increases or
decreases in interest rates charged by other lenders or market
rates in general, and that Administrative Agent may make various
business or other loans at rates of interest having no
relationship to such rate, and (b) the sum of the Federal Funds
Effective Rate plus 200 basis points.
"Credit Facilities" means the Revolving Credit Facility and
the Term Loan Facilities.
"Custodial Agreement" means each written agreement in form
and content acceptable to Administrative Agent, entered into
among the applicable Custodian, AMRESCO and all applicable
Borrowers and/or Guarantors, and Administrative Agent, pursuant
to which such Custodian agrees to act as custodian and bailee for
the documents evidencing certain of the Assigned Loans, as any
such Custodial Agreement may be amended, modified or supplemented
from time to time, together with any restatements, replacements
or substitutions thereof. Schedule 15 lists all Custodial
Agreements in effect on the date hereof, which Custodial
Agreements cover and relate to (without limitation) all Assigned
Loans comprising any part of the Borrowing Base.
"Custodian" means a financial institution or other Person
approved by the Administrative Agent to act as a custodian under
a Custodial Agreement.
"Default" means any condition, circumstance or event which
constitutes an Event of Default or which with the giving of
notice or lapse of time or both would, unless cured or waived,
become an Event of Default.
"Default Rate" means the fluctuating per annum rate of
interest equal to the lesser of (i) four percent (4.0%) plus the
Corporate Base Rate, or (ii) the Maximum Lawful Rate.
"Discontinued Operations" means the operations of the
Subsidiaries which are identified as "Discontinued Operations
Subsidiaries" on Schedule 7.
"Dollar Amount" of any currency at any date means (i) the
amount of such currency if such currency is Dollars or (ii) the
equivalent in Dollars of such currency if such currency is any
currency other than Dollars, calculated on the basis of the
arithmetical mean of the buy and sell spot rates of exchange of
the Administrative Agent for such currency on the London market
at 11:00 a.m., London time.
"Dollars" and "$" mean the lawful currency of the United
States of America.
"Eligible Currency" means any currency other than Dollars
(i) that is readily available, (ii) that is freely traded,
(iii) in which deposits are customarily offered to banks in the
London interbank market, (iv) which is convertible into Dollars
in the international interbank market and (v) as to which a
Dollar Amount may be readily calculated.
"Environmental Laws" means any and all federal, state, local
and foreign statutes, laws, judicial decisions, regulations,
ordinances, rules, judgments, orders, decrees, plans,
injunctions, permits, concessions, grants, franchises, licenses,
agreements and other governmental restrictions relating to
(i) the protection of the environment, (ii) the effect of the
environment on human health, (iii) emissions, discharges or
releases of pollutants, contaminants, hazardous substances or
wastes into surface water, ground water or land, or (iv) the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants,
hazardous substances or wastes or the clean-up or other
remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any rule or regulation
issued thereunder.
"Euro" and/or "EUR" means the euro referred to in Council
Regulation (EC) No. 1103/97 dated June 17, 1997, passed by the
Council of the European Union, or, if different, the then lawful
currency of the member states of the European Union that
participate in the third stage of Economic and Monetary Union.
"Eurocurrency" means any Eligible Currency.
"Eurocurrency Comparable Rate" means, with respect to each
calendar month period, the sum of (a) the quotient of (i) the
Eurocurrency Reference Rate for such calendar month period as
determined on the last Business Day of the preceding month,
divided by (ii) one minus the Reserve Requirement (expressed as a
decimal) applicable on such date of determination, plus (b) the
Applicable Eurocurrency Rate Margin. The Eurocurrency Comparable
Rate shall be rounded to the next higher multiple of 1/16 of 1%
if the rate is not such a multiple. The Eurocurrency Comparable
Rate shall adjust automatically as of the first day of each
calendar month based on the Eurocurrency Reference Rate
determined by Administrative Agent for such month.
"Eurocurrency Reference Rate" means a rate determined by
Administrative Agent on the last Business Day of each calendar
month (to be applicable for the next succeeding calendar month)
at which deposits in Dollars for a one (1) month period beginning
on such date are offered based on information presented on the
Telerate Screen as of 11:00 A.M. (London time) on such Business
Day; provided, that if two or more such offered rates appear on
the Telerate Screen in respect of such one-month interest period,
the arithmetic mean of all such rates (as determined by
Administrative Agent) will be the rate used; provided, further,
that if the Telerate System ceases to provide such interest rate
quotations, such rate shall be the average rate of interest
determined by Administrative Agent (rounded upward to the nearest
.01%) at which deposits in Dollars are offered for the relevant
one-month period by Administrative Agent to banks with combined
capital and surplus in excess of $500,000,000 in the London
interbank market as of 11:00 A.M. (London time) on the last
Business Day of the applicable calendar month.
"Event of Default" means an event described in Article VIII.
"Excluded Foreign Subsidiaries" means the Foreign
Subsidiaries of AMRESCO organized under the laws of Japan,
Thailand, Korea and Mexico, and any Subsidiaries of such Foreign
Subsidiaries, and AMRESCO Japan Portfolio Investments, Inc., a
Delaware corporation that is a direct Wholly-Owned Subsidiary of
AMRESCO whose sole business and only assets are directly related
to the operations of AMRESCO Japan Holdings Y.K.
"Excluded Subsidiaries" means, collectively, (a) all
Investment Advisor Subsidiaries, Partially-Owned Subsidiaries,
and AMRESCO Securities, Inc., while acting as a broker-dealer,
(b) all Subsidiaries established as bankruptcy remote special
purpose entities in connection with any asset securitization of
any kind and no matter how such securitization is treated under
Agreement Accounting Principles, and (c) the Excluded Foreign
Subsidiaries, a list of all Excluded Subsidiaries on the date
hereof being attached hereto as Schedule 6, which Schedule 6
shall be amended and supplemented from time to time as provided
in Section 7.1(vii).
"Excluded Taxes" means, in the case of each Lender or
applicable Lending Installation and the Administrative Agent,
taxes imposed on its overall net income, and franchise taxes
imposed on it by (a) the jurisdiction under the laws of which
such Lender or the Administrative Agent is incorporated or
organized or (b) the jurisdiction in which the Administrative
Agent's or such Lender's principal executive office or such
Lender's applicable Lending Installation is located.
"Exhibit" refers to an exhibit to this Agreement, unless
another document is specifically referenced.
"Existing Credit Agreement" is defined in Recital I of this
Agreement.
"Existing Credit Facilities" is defined in Recital I of this
Agreement.
"Existing Guaranty" and "Existing Guarantor" are defined in
Recital II of this Agreement.
"Facility Foreign Currency Exchange Agreement" means a Rate
Hedging Agreement entered into between a Revolving Lender (or an
Affiliate of a Revolving Lender) and AMRESCO, together with any
other applicable Borrower or Guarantor, for the purpose of
settling obligations related to fluctuations in foreign currency
liabilities of or owing by AMRESCO or any of its Subsidiaries, in
accordance with the terms of Section 2.1.5.
"Facility FX Exposure" means, on any date, the aggregate
amount of the fair market value of the cost to settle all
outstanding Facility Foreign Currency Exchange Agreements then in
effect (assuming all Facility Foreign Currency Exchange
Agreements were to be terminated as of that date), which amount
shall not be greater than $10,000,000 in the aggregate at any one
time for all Facility Foreign Currency Exchange Agreements then
in effect.
"Facility FX Fee" is defined in Section 2.5.3.
"Facility Letter of Credit" means a letter of credit issued
by the Issuing Lender for the account of a Borrower or a
Guarantor pursuant to this Agreement.
"Facility Letter of Credit Exposure" means the aggregate
amount of the unfunded portion of each Facility Letter of Credit
outstanding at any time.
"Facility Letter of Credit Fee" is defined in Section 2.5.2.
"Federal Funds Effective Rate" means, for any day, the rate
per annum (rounded upwards if necessary, to the nearest 1/100th
of 1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day, provided that (a) if such day is
not a Business Day, the Federal Funds Effective Rate for such day
shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding
Business Day, the Federal Funds Effective Rate for such day shall
be the average rate quoted to Administrative Agent on such day on
such transactions from three Federal funds brokers of recognized
standing.
"Federal Lending Programs" is defined in Section 6.24.
"FEOMA" is defined in Section 2.1.5.
"Floating Rate" means, for any day, a rate per annum equal
to (a) the Corporate Base Rate in effect on such day, plus
(b) the Applicable Base Rate Margin, in each case changing when
and as the Corporate Base Rate and/or the Applicable Base Rate
Margin each change.
"Foreign Subsidiary" means a Subsidiary of AMRESCO
incorporated or organized in a jurisdiction other than one of the
fifty states of the United States or the District of Columbia.
"Foreign Subsidiary Inter-Company Note" means a promissory
note in form and substance approved by Administrative Agent
representing the amount of any loans, advances or extensions of
credit of any kind of any Borrower or any Guarantor to any
Foreign Subsidiary, together with any and all revolving loan
agreements or other ancillary loan, credit or security agreements
executed in connection with or relating to any such loans,
advances or extensions of credit.
"FX Lender" means a Revolving Lender or an Affiliate of a
Revolving Lender that at the time in question is a counterparty
to a Facility Foreign Currency Exchange Agreement.
"Governmental Authority" means any government, any state or
other political subdivision thereof, or any Person exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guarantor" means each Subsidiary of AMRESCO that is not a
Borrower or an Excluded Subsidiary or an indirect Foreign
Subsidiary of AMRESCO (other than AMRESCO Funding Canada Inc.),
such Subsidiaries as of the date hereof being listed as
Guarantors on Schedule 1, which Schedule 1 may be amended,
supplemented and/or replaced from time to time to add any
additional Guarantors after the date hereof.
"Guaranty" means that certain Guaranty Agreement dated as of
the date hereof executed by each Guarantor in favor of the
Administrative Agent and the Lenders (which Guaranty is an
amendment and restatement of the Existing Guaranty), and any
other separate Guaranty Agreement that may be executed on or
after the date hereof by any Subsidiary of AMRESCO or any other
Person, in each case as amended, modified, supplemented or
restated and in effect from time to time.
"Indebtedness" of a Person means, at any date, without
duplication, (a) all indebtedness, obligations and liabilities of
such Person which, in accordance with Agreement Accounting
Principles and practices thereof, would be included in
determining liabilities as shown in the liability section of the
balance sheet of such Person, including, without limitation, all
indebtedness, obligations and liabilities of such Person for
borrowed money, obligations evidenced by bonds, debentures, notes
or other similar instruments, whether recourse or non-recourse
and whether secured or unsecured, trade payables, and structured
financing transactions of any type, (b) all other indebtedness
(including Capitalized Lease Obligations) of such Person on which
interest charges are customarily paid or accrued, (c) all
obligations for indebtedness in respect of Contingent Obligations
of such Person and the Net ▇▇▇▇-to-Market Exposure of Rate
Hedging Agreements, (d) the unfunded portion of, and unreimbursed
portion of drawings under, all Letters of Credit issued for the
account or upon the application of such Person, and (e) all
personal liability of such Person as a general partner or joint
venturer of a partnership or joint venture for obligations of
such partnership or joint venture of the nature described in
(a) through (d) preceding.
"Intangible Assets" of any Person means those assets of such
Person which are (a) deferred assets, other than prepaid
insurance and prepaid taxes, (b) patents, copyrights, trademarks,
tradenames, franchises, goodwill, experimental expenses and other
similar assets which would be classified as intangible assets on
a balance sheet of such Person, prepared in accordance with
Agreement Accounting Principles, and (c) unamortized debt
discount and expenses.
"Inter-Company Note" means a promissory note in form and
substance approved by Administrative Agent representing the
amount of any loans, advances or extensions of credit of any kind
of any Borrower or any Guarantor to any Subsidiary of such
Borrower or Guarantor other than a Foreign Subsidiary, together
with any and all revolving loan agreements or other ancillary
loan, credit or security agreements executed in connection with
or relating to any such loans, advances or extensions of credit.
"Interest Deficiency Payment" is defined in Section 2.19(b).
"Interest/Dividend Coverage Ratio" means, as of any date of
determination, the ratio of (a) Consolidated EBITDA for the
immediately preceding twelve month period to (b) the sum of
(i) Consolidated Interest Expense, plus (ii) the amount of any
dividends or distributions paid on any preferred stock of AMRESCO
or any of its Subsidiaries to Persons who are not Affiliates of
AMRESCO and its Subsidiaries, other than in kind dividends on
Permitted Preferred Stock, less (iii) the amount of prior fees
paid related to financings and capital events of AMRESCO and its
Subsidiaries that are expensed in such period, all for the same
immediately preceding twelve calendar month period.
"Interest Rate Exposure Report" means a report showing the
aggregate amount of each Borrower's and each Guarantor's Rate
Hedging Obligations (including without limitation under all
Facility Foreign Currency Exchange Agreements) and how such
obligations were calculated, together with evidence satisfactory
to Administrative Agent that the amount of such Rate Hedging
Obligations have been confirmed by the counterparty to the
related Rate Hedging Agreements.
"Investments" of a Person means any loans, advances (other
than customary commission, travel and similar advances to
officers and employees made in the ordinary course of business),
extensions of credit (other than accounts receivable arising in
the ordinary course of business on terms customary in the trade)
or contributions of capital by such Person; stocks, bonds, mutual
funds, partnership interests, notes, debentures or other
securities owned by such Person; any deposit accounts and
certificates of deposit owned by such Person; and structured
notes, derivative financial instruments and other similar
instruments or contracts owned by such Person.
"Investment Advisor Subsidiary" means AMRESCO Advisors, Inc.
and any other existing or future Subsidiary of a Borrower which
is subject to the Investment Advisors Act of 1940, as amended, or
the Investment Company Act of 1940, as amended.
"Issuing Lender" means Bank of America in its capacity as
issuer of the Facility Letters of Credit.
"Lead Arranger" means Banc of America Securities LLC, and
its successors.
"Legal Requirements" means (a) any and all present and
future judicial decisions, statutes, laws, rulings, rules,
orders, regulations, permits, licenses, certificates, or
ordinances of any Governmental Authority in any way applicable to
any Borrower, any Guarantor or any Subsidiary, (b) the presently
or subsequently effective bylaws and articles of incorporation,
partnership agreement, operating agreement, and any other form of
business association agreement of any Borrower, any Guarantor, or
any Subsidiary, (c) any and all covenants, conditions or
restrictions applicable to the Collateral or the ownership, use
or occupancy thereof, and (d) any and all leases or contracts
(written or oral) of any nature that relate in any way to any
Collateral, or any portion thereof, or to which any Borrower, any
Guarantor or any Subsidiary may be bound, and in each case which,
if violated, would materially and adversely affect (i) the
present or potential ownership, use, sale, occupancy or
possession of the Collateral, or any part thereof, by any
Borrower, any Guarantor or any Subsidiary, (ii) Lenders' Liens or
(iii) the financial condition of any Borrower, any Guarantor or
any Subsidiary.
"Lend Lease" means Lend Lease (US) Services, Inc., a
Delaware corporation.
"Lend Lease Agreement" means the Asset Purchase Agreement
dated December 8, 1999, executed by and among AMRESCO, AMRESCO
Management, Inc., AMRESCO Services, L.P., AMRESCO Capital, L.P.,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., and such other Subsidiaries of
AMRESCO as are named therein, as sellers, and Lend Lease, as
purchaser.
"Lend Lease Closing Date" means the date of the closing of
the transactions contemplated by the Lend Lease Agreement.
"Lend Lease Deferral" means the aggregate sum of (a) the
difference between 95% and 85% of the Lend Lease Net Proceeds if
the Lend Lease Required Payment is calculated pursuant to clause
(b) of the definition thereof, plus (b) the difference between
95% and 85% of any funds from the Lend Lease Post-Closing
Adjustment Account to be paid to Administrative Agent pursuant to
Section 2.2.1(b), plus (c) the difference between 95% and 85% of
the amount of any payment made on the Lend Lease Holdback Note,
each in the case that the Lend Lease Closing Date occurs prior to
the occurrence of the SREP Sale Date or Structured Real Estate
Asset Sales for all or substantially all of the SREP Assets.
"Lend Lease Holdback Note" means the promissory note in the
principal face amount of $25,000,000 executed by Lend Lease and
payable to AMRESCO, delivered to AMRESCO on the Lend Lease
Closing Date pursuant to Section 3.1 of the Lend Lease Agreement.
"Lend Lease Net Proceeds" means the gross cash sales
proceeds received by the sellers under the Lend Lease Agreement,
less (a) reasonable and customary closing costs and expenses paid
by the sellers under the Lend Lease Agreement, including without
limitation investment banking fees and reasonable attorneys'
fees, (b) the portion of the purchase price, not to exceed
$8,800,000 in the aggregate, paid to cover the earnout payable to
the former shareholders of Fowler, Goedecke, ▇▇▇▇▇ & ▇'▇▇▇▇▇▇ and
PNS Realty Partners, L.P. and certain of its affiliated entities,
which amount shall be paid to the Persons entitled to same on the
Lend Lease Closing Date, and (c) an amount not to exceed
$10,500,000 in the aggregate to be paid on or before the Lend
Lease Closing Date to certain existing employees of AMRESCO and
the Discontinued Subsidiaries for retention bonuses and
incentives for continuing in such employment after the Lend Lease
Closing Date.
"Lend Lease Post-Closing Adjustment Account" means a deposit
account established and held at Bank of America into which a
portion of the Lend Lease Net Proceeds, not to exceed $6,000,000,
shall be deposited on the Lend Lease Closing Date to be held as
Collateral for the Obligations, subject to an Account Assignment,
for the sole purpose of use by AMRESCO to pay any net amounts
owing by the sellers to the purchasers under the Lend Lease
Agreement pursuant to the calculations to be made after the Lend
Lease Closing Date as post-closing adjustments pursuant to
Section 3.3 of the Lend Lease Agreement.
"Lend Lease Required Payment" means a payment in the amount
of the greater of (a) $180,000,000 or (b) either (i) if the SREP
Sale Date or Structured Real Estate Asset Sales for all or
substantially all of the SREP Assets has occurred prior to the
Lend Lease Closing Date, 95% of the Lend Lease Net Proceeds, or
(ii) if the Lend Lease Closing Date is prior to the occurrence of
the SREP Sale Date or Structured Real Estate Asset Sales for all
or substantially all of the SREP Assets, 85% of the Lend Lease
Net Proceeds (with the difference between the amount calculated
under b(i) and b(ii) above being included in the Lend Lease
Deferral); provided that in the case of either (a) or (b) above,
the amount, if any, deposited in the Lend Lease Post-Closing
Adjustment Account on the Lend Lease Closing Date in accordance
with the terms of this Agreement shall be deducted from the
amount of the Lend Lease Net Proceeds for purposes of determining
the Lend Lease Required Payment. As used in clauses (b)(i) and
(b)(ii), "substantially all" shall be determined in the manner
described in Section 2.2.1(b).
"Lenders" means each of the lending institutions or funds
listed as a "Lender" on Schedule 1, as Schedule 1 may be
modified, amended, supplemented or replaced from time to time,
which term shall include both the Revolving Lenders and the Term
Lenders.
"Lending Installation" means, with respect to a Lender or
the Administrative Agent, the office, branch, subsidiary or
affiliate of such Lender or the Administrative Agent listed on
the signature pages hereof or as otherwise selected by such
Lender or the Administrative Agent pursuant to Section 2.22.
Schedule 3 shows the current Lending Installations of the Lenders
and the Administrative Agent.
"Letter of Credit" of a Person means a letter of credit or
similar instrument which is issued upon the application of such
Person or upon which such Person is an account party or for which
such Person is in any way liable, including, without limitation,
all Facility Letters of Credit.
"Lien" means any lien (statutory or other), mortgage,
pledge, hypothecation, assignment, deposit arrangement,
encumbrance or preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever
(including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other
title retention agreement).
"Loan" means, with respect to a Lender or the Swingline
Lender, such Lender's loan made pursuant to Article II, under any
and all of the Credit Facilities, and "Loans" means all of such
loans made and outstanding at any time (whether as an Advance or
the outstanding principal balances of Term Loan A or Term Loan
B). The term "Loans" shall include all amounts outstanding on
the date hereof under the Existing Credit Facilities, which are
being renewed and restructured hereunder.
"Loan Documents" means this Agreement, the Notes, the
Security Documents, the Guaranty, and any other agreement or
instrument executed in connection with the Existing Credit
Agreement or this Agreement, and all modifications, renewals,
extensions, supplements, restatements and replacements thereof.
"LOC Application" is defined in Section 2.16.
"Lockbox" means a post office box, or collectively post
office boxes, established by the Borrowers and Guarantors and
Lockbox Agent pursuant to the provisions of Section 5.6 and the
Lockbox Agreement.
"Lockbox Accounts" means the cash collateral accounts
maintained with Lockbox Agent and styled respectively "[name of
particular Borrower or particular Guarantor] Lockbox Account for
the Benefit and Under the Control of Bank of America, N.A., as
Administrative Agent for Lenders," which accounts shall be
(a) subject to the provisions of Section 5.6 and the Lockbox
Agreement, and (b) pledged and assigned to Administrative Agent,
for the benefit of the Lenders, as additional security for the
payment, performance and observance of the Obligations.
"Lockbox Agent" means Bank of America.
"Lockbox Agreement" means, collectively, the Lockbox
Agreement dated the date hereof, and any other lockbox agreement
or any other similar agreement or arrangement which is created to
cause the proceeds of Assigned Loans, Mortgaged Properties or
other Collateral, or any other proceeds of asset sales or other
dispositions to be paid to Administrative Agent hereunder to be
placed under the dominion and control of Administrative Agent (or
another agent) for the benefit of the Lenders.
"Managed Asset Portfolios" means the portfolios of Assigned
Loans and Mortgaged Properties owned by Borrowers and Guarantors
comprised of distressed loan and real estate assets purchased by
the applicable Borrower or Guarantor, including Mortgaged
Properties owned by a Borrower or a Guarantor resulting from
foreclosure or settlement proceedings with respect to such
Assigned Loans. A listing of such portfolios containing any
active Assigned Loans or Mortgaged Properties in the Borrowing
Base (regardless of whether any Borrowing Base value is
attributable thereto) as of the date hereof is set forth on
Schedule 13.
"Margin Regulations" mean Regulations T, U and X of the
Board of Governors of the Federal Reserve System, as in effect
from time to time.
"Material Adverse Effect" means a material adverse effect on
(i) the business, results of operation, or financial condition of
AMRESCO and its Subsidiaries taken as a whole, excluding any
write-down or payments specifically included in the calculation
of Consolidated EBITDA as set forth in the definition thereof,
(ii) the ability of AMRESCO or any other Borrower or any
Guarantor to perform its obligations under the Loan Documents to
which it is a party, or (iii) the validity or enforceability of,
or the assertion by any Borrower or Guarantor of the invalidity
or unenforceability of, any of the Loan Documents or the rights
or remedies of the Administrative Agent or the Lenders
thereunder.
"Material Indebtedness" is defined in Section 8.1.5.
"Maximum Lawful Rate" means the maximum rate (or, if the
context so permits or requires, an amount calculated at such
rate) of interest which, at the time in question would not cause
the interest charged on the Loans at such time to exceed the
maximum amount which Lenders would be allowed to contract for,
charge, take, reserve, or receive under applicable federal or
state law after taking into account, to the extent required by
applicable law, any and all relevant payments, fees or charges
under the Loan Documents. If under applicable law there is no
legal limitation on the amount or rate of interest that may be
charged on amounts outstanding in respect of the Loans, there
shall be no Maximum Lawful Rate in respect of the Loans,
notwithstanding any reference thereto herein or in any of the
other Loan Documents.
"MIC" means Mortgage Investors Corporation, an Ohio
corporation.
"MIC Merger Agreement" means the Agreement and Plan of
Merger, dated July 14, 1998 by and among AMRESCO, MIC
Acquisition, Inc., MIC, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and certain other
stockholders, as amended by the amendment thereto dated March 31,
1999.
"MIC Notes" means those eight (8) promissory notes payable
to AMRESCO in an aggregate original principal amount not
exceeding $17,000,000, evidencing loans to former shareholders of
MIC, and with respect to which AMRESCO or any Subsidiary is
entitled to an offset under the MIC Merger Agreement, and all
renewals, extensions, modifications, restatements or replacements
of such notes.
"MIC Transaction" means the transaction contemplated by the
MIC Merger Agreement.
"Mortgage" means any deed of trust, mortgage, fixed or
floating charge or other Lien document covering a Mortgaged
Property executed by any Borrower or any Guarantor, granted in
favor of Administrative Agent, for the benefit of Lenders, to
secure repayment of the Loans and the other Obligations
(including without limitation all Mortgages executed pursuant to
the Existing Credit Agreement or the credit agreements replaced
thereby), complying with all laws of the applicable jurisdiction
for creating a valid lien on the subject Mortgage Property and
for recording in such jurisdiction, substantially in the form
approved by Administrative Agent, and all renewals, extensions,
modifications, amendments or supplements thereto, and all
mortgages, deeds of trust, fixed or floating charges or other
documents given in renewal, extension, modification, restatement
or replacement thereof.
"Mortgaged Property or Mortgaged Properties" means all lots
or parcels of land which any Borrower or any Guarantor owns on
the Closing Date or which it may hereafter acquire and which has
not been granted as collateral for Indebtedness other than the
Credit Facilities as permitted by Section 7.15, and all
improvements, fixtures and personal property located thereon and
all other property referenced in and subject to the Mortgages.
The Mortgaged Property is intended to include all of the above-
described real property whether or not a Mortgage is actually
granted or filed. A list of the Mortgaged Properties owned by
the Borrowers and the Guarantors as of the date hereof is
attached hereto as Schedule 16.
"Multiemployer Plan" means a Plan maintained pursuant to a
collective bargaining agreement or any other arrangement to which
AMRESCO or any member of the Controlled Group is a party to which
more than one employer is obligated to make contributions.
"Net ▇▇▇▇-to-Market Exposure" of a Person means, as of any
date of determination, the excess (if any) of all unrealized
losses over all unrealized profits of such Person arising from
Rate Hedging Agreements. "Unrealized losses" means the fair
market value of the cost to such Person to settle such Rate
Hedging Agreement as of the date of determination (assuming the
Rate Hedging Agreement were to be terminated as of that date),
and "unrealized profits" means the fair market value of the gain
to such Person to settle such Rate Hedging Agreement as of the
date of determination (assuming such Rate Hedging Agreement were
to be terminated as of that date).
"Non-U.S. Borrower" is defined in Section 3.1(b).
"Non-U.S. Lender" is defined in Section 3.5(iv).
"Notes" means collectively the Revolving Notes, the Term
Loan A Notes, the Term Loan B Notes, and the Swingline Note; and
"Note" means any of them.
"Obligations" means all present and future indebtedness,
obligations and liabilities of any and all of the Borrowers,
Guarantors and other Subsidiaries now or hereafter existing or
arising under or in connection with this Agreement, the Notes,
the Facility Letters of Credit, the Security Documents, or any
other of the Loan Documents (specifically including, without
limitation, all Loans and the principal amount outstanding under
the Notes), together with: (a) all interest accrued thereon;
(b) all fees payable to the Administrative Agent, the Issuing
Agent and/or the Lenders; (c) all costs, expenses, and reasonable
attorneys' fees of counsel to Administrative Agent and Lenders
(as a group) and of counsel to any Lender (subject to the
limitations set forth in Section 11.6) incurred in the
negotiation and documentation of this Agreement and the other
Loan Documents and of any consents or approvals under, or any
amendments, waivers or extensions of, or supplements to the Loan
Documents, and the administration (including without limitation
inspections, subject to the limitations in Section 7.9),
enforcement or collection of the Loan Documents and the
Obligations (specifically including, without limitation, any of
the foregoing incurred in connection with any bankruptcy or other
insolvency proceedings of any Borrower or any Guarantor); (d) the
reimbursement and payment of all sums which might be advanced by
Administrative Agent or any Lender to pay or satisfy amounts
required to be paid by any Borrower or any Guarantor under this
Agreement or under any other Loan Document; (e) all liability
which any Borrower or any Guarantor may incur with respect to any
Rate Hedging Obligations between any Borrower or any Guarantor
and any Lender or any Affiliate of a Lender (specifically
including without limitation in respect of all Facility Foreign
Currency Exchange Agreements); and (f) all costs, charges,
reasonable commissions, reasonable attorneys' fees and expenses
owing and to become owing in connection with the documentation,
administration, enforcement and collection of the foregoing
obligations and indebtedness, and those owing or to become owing
in connection with the repossession, operation, maintenance,
preservation or foreclosure of any or all of the Collateral;
regardless of whether such indebtedness, obligations and
liabilities are direct, indirect, fixed, contingent, liquidated,
unliquidated, joint, several or joint and several. The
Obligations shall include all renewals, extensions,
modifications, restatements, rearrangements and replacements of
any of the above-described obligations and indebtedness.
"Other Taxes" is defined in Section 3.5(ii).
"Partially-Owned Subsidiary" means any Subsidiary of AMRESCO
that is not a Wholly-Owned Subsidiary.
"Participants" is defined in Section 10.2.1.
"Payment Date" means the first (1st) day of each calendar
month.
"PBGC" means the Pension Benefit Guaranty Corporation, or
any successor thereto.
"Permitted Debt Report and Certification" means a report
(a) showing such information concerning the Indebtedness of
Borrowers, Guarantors and their Subsidiaries as required by
Administrative Agent from time to time, including, without
limitation, the amount of each loan and other Indebtedness
(including Warehouse Lines) shown on Schedule 8, and any amended
or new Warehouse Lines obtained after the date hereof, the
entities obligated as borrowers thereunder, the payment schedule
thereunder, the maturity thereof, and the collateral and
guaranties securing such Indebtedness, (b) disclosing any
information of which AMRESCO or any Borrower is aware regarding
the maturity of, or the renewal or extension of, or the failure
of any lender to agree to renew or extend, any Warehouse Line or
any other loan or extension of credit to AMRESCO or any of its
Subsidiaries necessary for the operation of the business of
AMRESCO or any Subsidiary or for which AMRESCO and its
Subsidiaries do not have a means to repay or refinance, and
(c) certifying compliance by Borrowers and Guarantors with the
limitations on Indebtedness and Warehouse Lines contained in
Section 7.11 and otherwise in this Agreement, in detail
satisfactory to Administrative Agent.
"Permitted Encumbrances" means with respect to any Mortgaged
Property:
(a) Liens securing the Notes in favor of the Lenders;
(b) Exceptions affecting title which are shown in a
Title Policy included in any Borrower's or any Guarantor's files
or are described with respect to a particular Mortgaged Property
in such Borrower's or Guarantor's underwriting or due diligence
files with respect to such Mortgaged Property;
(c) In the case of any portion of the Mortgaged
Property that is not covered by a Title Policy, minor defects in
title or customary easements, platted building lines, restrictive
covenants, mineral reservations and similar exceptions affecting
title which do not secure the payment of money;
(d) Inchoate statutory or operators' liens securing
obligations for labor, services, materials and supplies furnished
to the Mortgaged Properties, which (i) are not delinquent, or
(ii) are being contested by any Borrower or any Guarantor in good
faith and for which such Borrower or such Guarantor has obtained
a proper payment and performance bond in the amount of the
contested claim;
(e) Mechanics', materialmen's, warehousemen's,
journeymen's and carriers' liens and other similar Liens arising
by operation of law or statute in the ordinary course of business
if (i) the underlying claim is not delinquent and did not in any
event cover a billing period not exceeding sixty (60) days, or
(ii) unless the claim giving rise to such Lien is being contested
by any Borrower or any Guarantor in good faith and for which such
Borrower or Guarantor has obtained a proper payment and
performance bond in the amount of the contested claim; and
(f) Liens for Taxes or other impositions not yet due
or not yet delinquent, or, if delinquent, that are being
contested by the applicable Borrower or Guarantor as permitted by
and in accordance with the terms and conditions set forth in
herein.
"Permitted Preferred Stock" means one or more series of
preferred stock of AMRESCO issued after the date hereof under the
terms of which the holders thereof are not entitled to any
distributions or dividends or repurchase rights (other than
dividends payable in additional shares of common stock of AMRESCO
or Permitted Preferred Stock) at any time prior to full and final
payment of all the Credit Facilities.
"Person" means any natural person, corporation, firm, joint
venture, partnership, limited liability company, association,
enterprise, trust or other entity or organization, or any
government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" means an employee pension benefit plan which is
covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Code as to which AMRESCO or
any member of the Controlled Group may have any liability.
"Pledge Agreement" means, collectively, the Stock Pledge
Agreement dated as of August 12, 1998, executed by AMRESCO and
the Existing Guarantors and certain other Subsidiaries of AMRESCO
in connection with the Existing Credit Agreement, as amended by
the Supplements and further amended on the date hereof, and all
other pledges of, and security agreements covering, stock or
other equity interests, executed by any one or more Borrowers or
Guarantors or other Subsidiaries of AMRESCO, in favor of
Administrative Agent, for the benefit of the Lenders, covering
all of the issued and outstanding stock or other ownership
interests owned by AMRESCO and the other Borrowers and the
Guarantors, and every other Subsidiary of AMRESCO and the other
Borrowers (expressly including the stock owned by AMRESCO or any
other Borrower or any Guarantor or other Subsidiary in
Subsidiaries established as bankruptcy remote special purpose
entities in connection with any asset securitization and of all
Foreign Subsidiaries, including indirect Foreign Subsidiaries
whether or not Guarantors, except as provided below), and all
stock or other ownership interests in each Partially-Owned
Subsidiary owned by a Borrower or a Guarantor or any Subsidiary
wholly-owned, directly or indirectly, by a Borrower or a
Guarantor, but excluding only (a) the stock in the Investment
Advisor Subsidiaries and (b) subject to Section 5.1.4, the stock
and other ownership interests in the Excluded Foreign
Subsidiaries (other than AMRESCO's 100% stock ownership interest
in AMRESCO Japan Portfolio Investments, Inc., which shall be
pledged) or owned by the Excluded Foreign Subsidiaries, and all
amendments, supplements and restatements thereof. Without
limitation of the foregoing, the term Pledge Agreement includes
(i) the separate Stock Pledge Agreement dated August 12, 1998,
executed by AMRESCO UK Holdings Limited and AMRESCO UK Ventures
Limited in favor of Administrative Agent, as supplemented by
Supplement III, and (ii) that certain Security Agreement dated
June 28, 1996, executed by AMRESCO, in favor of NationsBank of
Texas, N.A., covering all shares of stock owned by AMRESCO in its
Wholly-Owned Subsidiary AMRESCO Jersey Ventures Limited, a
company incorporated under the laws of Jersey, Channel Islands,
as amended (including by Supplemental Agreement dated as of
December 15, 1999 in connection with the Supplement III).
"Pledged Asset Schedule and Certification" means a schedule
of all assets that are owned by (a) Borrowers and Guarantors and
required to be pledged to Administrative Agent for the benefit of
the Lenders pursuant to the Loan Documents and (b) each Foreign
Subsidiary showing which assets have been pledged and to whom and
which assets are not pledged, and a certification that such
assets have been so pledged or are not pledged; provided, that
any assets listed therein but not so pledged shall (except in the
case of assets of Foreign Subsidiaries, which shall be subject to
Section 5.1.4) be pledged to Administrative Agent for the benefit
of the Lenders as soon as practical but in no case more than
thirty (30) days after the required date for delivery of such
schedule.
"Pricing Schedule" means Schedule 5 attached hereto and
identified as such, as such Schedule may from time to time be
amended, modified, supplemented, restated or replaced.
"Property" of a Person means any and all property, whether
real, personal, tangible, intangible, or mixed, of such Person,
or other assets owned, leased or operated by such Person.
"Purchaser" is defined in Section 10.3.1.
"Rate Hedging Agreement" means an agreement, device or
arrangement providing for payments which are related to
fluctuations of interest rates, exchange rates, or forward rates
or commodity prices, including, but not limited to,
dollar-denominated or cross-currency interest rate swap or
exchange agreements, currency (including any Eligible Currency or
other foreign currency) exchange agreements, interest rate cap or
collar protection agreements, forward rate currency or interest
rate options, puts and warrants.
"Rate Hedging Obligations" of a Person means any and all
obligations of such Person, whether absolute or contingent, and
howsoever and whenever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and
substitutions therefor), under (a) any and all Rate Hedging
Agreements, specifically including without limitation all
Facility Foreign Currency Exchange Agreements, and (b) any and
all cancellations, buy backs, reversals, terminations or
assignments of any Rate Hedging Agreement.
"Regulation D" means Regulation D of the Board of Governors
of the Federal Reserve System as from time to time in effect and
any successor thereto or other regulation or official
interpretation of said Board of Governors relating to reserve
requirements applicable to member banks of the Federal Reserve
System.
"Regulation U" means Regulation U of the Board of Governors
of the Federal Reserve System as from time to time in effect and
any successor thereto or other regulation or official
interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or
carrying margin stocks applicable to member banks of the Federal
Reserve System.
"Related Fund" means, with respect to any Lender that is a
fund that invests in commercial loans, any other fund that
invests in commercial loans and is managed or advised by the same
investment advisor as such Lender or by an Affiliate of such
investment advisor.
"Reportable Event" means a reportable event as defined in
Section 4043 of ERISA and the regulations issued under such
section, with respect to a Plan, excluding, however, such events
as to which the PBGC has by regulation waived the requirement of
Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event, provided, however, that a failure
to meet the minimum funding standard of Section 412 of the Code
and of Section 302 of ERISA shall be a Reportable Event
regardless of the issuance of any such waiver of the notice
requirement in accordance with either Section 4043(a) of ERISA or
Section 412(d) of the Code.
"Reports" is defined in Section 11.6.
"Representatives" is defined in Section 11.6.
"Required Lenders" means Lenders in the aggregate having at
least 66b% of the Aggregate Commitment; provided that if the
Revolving Commitment has been terminated, then "Required Lenders"
shall mean Lenders whose Aggregate Loan Percentages, in the
aggregate, equal or exceed 66b%.
"Reserve Requirement" means, on any day, the maximum
aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D
on Eurocurrency liabilities. Each determination by
Administrative Agent of the Reserve Requirement shall, in the
absence of manifest error, be conclusive.
"Residual Interests Report" means a report satisfactory to
Administrative Agent describing, by category and book value, the
Retained Interests in Securtizations (as shown in AMRESCO's
consolidated balance sheet) owned by any Borrower, Guarantor or
Subsidiary.
"Revolving Commitment" means the aggregate amount of the
Commitment Amounts of all the Revolving Lenders under the
Revolving Credit Facility as set forth on the Commitment
Schedule, being $92,000,000 on the date hereof, subject to
limitations on availability and reductions as provided in this
Agreement. The amount of the Revolving Commitment available at
any time for Advances hereunder shall be limited to the Borrowing
Base then in effect and shall be reduced by (i) the Facility
Letter of Credit Exposure, (ii) the outstanding amount of all
Swingline Advances, and (iii) the Facility FX Exposure, each in
the amounts as then in effect.
"Revolving Credit Facility" is defined in Section 2.1.
"Revolving Credit Termination Date" means June 30, 2000, or
any earlier date on which the Revolving Commitment is reduced to
zero or otherwise terminated pursuant to the terms hereof.
"Revolving Lenders" means those Lenders designated as
Revolving Lenders on the Commitment Schedule, as modified or
amended from time to time pursuant to this Agreement, and their
permitted successors and assigns.
"Revolving Note" means a promissory note in the form
attached hereto as Exhibit D-1 in the initial amount of a
Revolving Lender's Commitment Amount, executed by all the
Borrowers and payable to the order of the applicable Revolving
Lender, and any modifications, amendments or supplements thereto,
any substitutions therefor, and any replacements, restatements,
renewals or extensions thereof, in whole or in part.
"SBA Guaranteed Loans" means loans that are originated or
held by AMRESCO Independence Funding, Inc. (or another Subsidiary
of AMRESCO licensed to originate or hold SBA guaranteed loans,
subject to Administrative Agent's prior written approval of any
such other Subsidiary) for which the Small Business
Administration (the "SBA") has issued or is to issue a guaranty
for a portion of any such loans pursuant to an agreement between
AMRESCO Independence Funding, Inc. (or such other Subsidiary
licensed to originate or hold SBA guaranteed loans and so
approved by Administrative Agent) and the SBA (an "SBA Lender
Agreement"), the SBA loan customer lists, the servicing rights
and other general intangibles related to such SBA Guaranteed
Loans or the collection or servicing thereof (excluding deposit
accounts not containing any payments on account of or other
proceeds of SBA Guaranteed Loans or the collection or servicing
thereof), and computer hardware and software related to and
utilized in the servicing solely of such SBA Guaranteed Loans and
other SBA Lender Agreement Assets, or any proceeds or products of
such SBA Guaranteed Loans, or other items for which the
applicable SBA Lender Agreement prohibits assignment thereof,
including without limitation retained interests in SBA Guaranteed
Loans or securitizations thereof, collection accounts and other
cash deposit accounts related to such SBA Guaranteed Loans, and
real property acquired by foreclosure of such SBA Guaranteed
Loans (collectively, "SBA Lender Agreement Assets").
"SBA Lender Agreement" is defined in the definition of SBA
Guaranteed Loans.
"SBA Lender Agreement Assets" is defined in the definition
of SBA Guaranteed Loans.
"Schedule" refers to a specific schedule to this Agreement,
unless another document is specifically referenced.
"Section" means a numbered section of this Agreement, unless
another document is specifically referenced.
"Security Agreement" means, collectively, the Security
Agreement dated as of August 12, 1998, executed by AMRESCO and
the Existing Guarantors (except for the Foreign Subsidiaries
other than AMRESCO Funding Canada Inc.) in connection with the
Existing Credit Agreement, as amended by the Supplements and
further amended on the date hereof, and all other security
agreements executed by any Borrower and/or any Guarantor, or any
other Subsidiary of AMRESCO pursuant to Section 5.1, in favor of
Administrative Agent, on behalf of and for the benefit of
Lenders, as security for the Obligations, which security
agreements are intended to cover all personal property of any
type of the Borrowers and the Guarantors (and any other
Subsidiaries) executing such agreements other than (a) the items
of collateral specifically pledged for secured Indebtedness
permitted under Section 7.11, including Warehouse Lines, and
(b) SBA Guaranteed Loans and related SBA Lender Agreement Assets,
and all amendments, modifications, supplements and replacements
thereof.
"Security Documents" means, collectively, (a) the Collateral
Assignment, the Security Agreement, the Pledge Agreement, the
Lockbox Agreement, all Mortgages, all Account Assignments and all
other documents or instruments granting a Lien in favor of the
Lenders (or Administrative Agent for the benefit of or on behalf
of the Lenders) as collateral for the Obligations, and all
financing statements and other filings, certificates and
instruments related thereto, and all supplements, modifications,
renewals or extensions thereof, and any documents executed in
modification, renewal, extension or replacement thereof, and
(b) the Guaranty and the Contribution Agreement executed by the
Guarantors.
"Servicer" means Lend Lease or one or more of its Affiliates
party to the Servicing Agreement, or such successor Servicer as
may have been approved by Administrative Agent pursuant to
Section 7.20.
"Servicing Agreement" means the Asset Management and
Servicing Agreement to be executed and delivered pursuant to the
Lend Lease Agreement on the Lend Lease Closing Date pursuant to
which the Servicer will manage and service assets of certain of
AMRESCO's Subsidiaries from and after the Lend Lease Closing
Date, and any modifications or amendments thereof or
substitutions or replacements thereof approved by Administrative
Agent pursuant to Section 7.20.
"Settlement Payment" is defined in Section 2.1.5.
"Single Employer Plan" means a Plan maintained by AMRESCO or
any member of the Controlled Group for employees of AMRESCO or
any member of the Controlled Group.
"Specified Asset Release Agreement" is defined in
Section 5.7.6.
"SREP Additional Fundings" means amounts expended from and
after the date hereof by AMRESCO or by AMRESCO Commercial
Finance, Inc. or AMRESCO Funding Canada Inc., as applicable, for
(a) funding additional commitments of AMRESCO Commercial Finance,
Inc. or AMRESCO Funding Canada Inc., as applicable, under
Assigned Loans in the Structured Real Estate Portfolio, and
(b) other funding obligations, cost overruns and other expenses
paid by AMRESCO Commercial Finance, Inc., AFC Equities, L.P. or
AMRESCO Funding Canada Inc., as applicable, with respect to the
SREP Assets.
"SREP Assets" means the Assigned Loans, the equity interests
and the Mortgaged Property owned by AMRESCO Commercial Finance,
Inc., AMRESCO Funding Canada, Inc. or AFC Equities, L.P., which
comprise the Structured Real Estate Portfolio, as described on
Schedule 14.
"SREP-Ocwen Sale" means the sale to Ocwen Federal Bank FSB
of a significant portion of the SREP Assets anticipated to occur
on or within ten (10) Business Days after the effective date
hereof, as disclosed to Administrative Agent and the Lenders
prior to the date hereof.
"SREP Required Payment" means a payment in the amount of 95%
of (a) the net proceeds (i.e. gross cash proceeds less reasonable
and customary closing costs and expenses as approved by
Administrative Agent) from the Structured Real Estate Portfolio
Sale or any Structured Real Estate Asset Sale, and (b) the amount
of any principal payment (whether scheduled, mandatory or a
voluntary prepayment) in excess of $500,000 made on an Assigned
Loan in the Structured Real Estate Portfolio or other SREP Asset.
"SREP Required Payment Date" means (a) the SREP Sale Date,
and (b) the date of any principal payment in excess of $500,000
on an Assigned Loan in the Structured Real Estate Portfolio or
other SREP Asset.
"SREP Sale Date" means the date of closing of the Structured
Real Estate Portfolio Sale.
"Structured Real Estate Asset Sale" means the sale of any
one of the SREP Assets.
"Structured Real Estate Portfolio" means the real estate
Assigned Loans and other SREP Assets owned by AMRESCO Commercial
Finance, Inc., AFC Equities, L.P. and AMRESCO Funding Canada
Inc., respectively, described in Schedule 14.
"Structured Real Estate Portfolio Sale" means the sale by
AMRESCO, AMRESCO Commercial Finance, Inc., AFC Equities, L.P.,
AMRESCO Funding Canada Inc., and any other applicable
Subsidiaries of AMRESCO, in one or a series of related
transactions, of all or substantially all (as determined pursuant
to Section 2.2.1(b)) of the SREP Assets (including without
limitation the SREP-Ocwen Sale).
"Subordinated Indebtedness" means the Indebtedness of
AMRESCO evidenced by notes made pursuant to the terms of those
certain Indentures dated January 15, 1996, and March 1, 1997,
executed by and between AMRESCO and Bank One, Columbus, N.A., as
Trustee.
"Subsidiary" means, for any Person, any corporation,
partnership, limited liability company or other entity (a) of
which more than fifty percent (50%) of the outstanding capital
stock or other ownership interests having ordinary voting power
to elect a majority of the board of directors or other persons
performing similar functions (including that of a general
partner) is at the time directly or indirectly owned by, or the
management is otherwise controlled by, such Person and any
Subsidiaries of such Person, and (b) in the case of AMRESCO and
its Subsidiaries, the financial statements of which are
consolidated with AMRESCO's financial statements in accordance
with Agreement Accounting Principles. The term Subsidiary shall
include Subsidiaries of Subsidiaries (and so on). Unless
otherwise qualified, references to "Subsidiary" or "Subsidiaries"
herein shall refer to those of AMRESCO.
"Substantial Portion" means, with respect to the Property of
AMRESCO and its Subsidiaries, Property which (a) represents more
than 10% of the consolidated tangible assets of AMRESCO and its
Subsidiaries as would be shown in the consolidated financial
statements of AMRESCO and its Subsidiaries as at the beginning of
the twelve-month period ending with the month in which such
determination is made, or (b) is responsible for more than 10% of
the consolidated net sales or of the consolidated net income of
AMRESCO and its Subsidiaries as reflected in the financial
statements referred to in clause (a) above.
"Supplements" and "Supplement III" are defined in Recital I
of this Agreement.
"Swingline Advance" means any Advance made by Swingline
Lender to a Borrower pursuant to Section 2.1.4.
"Swingline Commitment" means (i) prior to and on the
Transition Date, $25,000,000, and (ii) after the Transition Date,
$10,000,000.
"Swingline Lender" means Bank of America.
"Swingline Note" means the Swingline Note made by Borrowers
payable to the order of Swingline Lender, substantially in the
form attached as Exhibit D-4, evidencing the Swingline Advances,
and any amendments and modifications thereto, any substitutions
therefor, and any replacements, restatements, renewals or
extension thereof, in whole or in part.
"Taxes" means any and all present or future taxes, duties,
levies, imposts, deductions, charges or withholdings, and any and
all liabilities with respect to the foregoing, but excluding
Excluded Taxes.
"Telerate Screen" means the display designated as Screen
3750 (as to Dollars) on the Telerate System or such other screen
on the Telerate System as shall display the London interbank
offered rates for deposits in Dollars quoted by selected banks.
"Term Lenders" means collectively the Term Loan A Lenders
and the Term Loan B Lenders, in such capacities.
"Term Loan A" means the term loan to Borrowers by the Term
Loan A Lenders as set forth on the Commitment Schedule, in the
aggregate amount of $56,232,500, which Term Loan A represents the
term loan facility established under the Existing Credit
Agreement, which term loan facility is being restructured and
modified in accordance with the terms of this Agreement.
"Term Loan A Lenders" means those Lenders designated as the
Term Loan A Lenders on the Commitment Schedule, as modified or
amended from time to time pursuant to this Agreement, and their
permitted successors and assigns.
"Term Loan A Note" means a promissory note in the form
attached hereto as Exhibit D-2 evidencing a Term Loan A Lender's
share of Term Loan A, executed by all the Borrowers and payable
to the order of a Term Loan A Lender in the amount of such
Lender's Term Loan A Percentage of Term Loan A, and any
modifications, amendments or supplements thereto, any
substitutions therefor, and any replacements, restatements,
renewals or extensions thereof, in whole or in part.
"Term Loan A Percentage" means, for each Term Loan A Lender,
the percentage of Term Loan A held by such Term Loan A Lender as
set forth on the Commitment Schedule, as amended from time to
time.
"Term Loan B" means the term loan to Borrowers by the Term
Loan B Lenders as set forth on the Commitment Schedule in the
aggregate amount of $356,092,500, which Term Loan B represents a
portion of the revolving credit facility established under the
Existing Credit Agreement, which portion is being converted to a
term loan hereunder with no further availability for reborrowings
in accordance with the terms of this Agreement.
"Term Loan B Lenders" means those Lenders designated as the
Term Loan B Lenders on the Commitment Schedule, as modified or
amended from time to time pursuant to this Agreement, and their
permitted successors and assigns.
"Term Loan B Note" means a promissory note in the form
attached hereto as Exhibit D-3 evidencing a Term Loan B Lender's
share of Term Loan B, executed by all the Borrowers and payable
to the order of a Term Loan B Lender in the amount of such
Lender's Term Loan B Percentage of Term Loan B, and any
modifications, amendments or supplements thereto, any
substitutions therefor, and any replacements, restatements,
renewals or extensions thereof, in whole or in part.
"Term Loan B Percentage" means, for each Term Loan B Lender,
the percentage of Term Loan B held by such Term Loan B Lender as
set forth on the Commitment Schedule, as amended from time to
time.
"Term Loan Facilities" means Term Loan A and Term Loan B.
"Term Loan Facilities Maturity Date" means June 30, 2000.
"Title Company" means a title company or title companies
selected by a Borrower or a Guarantor and not disapproved by
Administrative Agent, together with any issuing agent that issues
all or any part of a Title Policy.
"Title Policy" means a Mortgagee or Loan Policy of Title
Insurance issued and underwritten by a Title Company for the
benefit of (a) Administrative Agent, on behalf of the Lenders,
covering the Mortgaged Property therein described and insuring
the lien of the Mortgage which covers such Mortgaged Property, or
(b) the applicable Borrower or Guarantor owning the applicable
Assigned Loan insuring a lien on Underlying Real Estate securing
such Assigned Loan; provided that with respect to an Assigned
Loan or Mortgaged Property owned by AMRESCO Funding Canada Inc.
and where the subject Underlying Real Estate or Mortgaged
Property is located in Canada, the term "Title Policy" may
include a title opinion issued by Canadian counsel in favor of
Administrative Agent and the Lenders, in form and substance
acceptable to Administrative Agent and its counsel.
"Total Consolidated Indebtedness" means at any time of
determination the sum of (a) Consolidated Indebtedness, plus
(b) the aggregate amount of unfunded obligations of any Borrower
or any Guarantor in respect of all outstanding Letters of Credit,
plus (c) the amount of any Contingent Obligations which are
reasonably quantifiable by Borrowers (as confirmed by
Administrative Agent) and which do not duplicate any amounts
otherwise included under this definition of Total Consolidated
Indebtedness.
"Transition Date" means the earlier of (i) the Lend Lease
Closing Date and (ii) the date on which the Borrowers are
obligated to make a principal payment on the Term Loans pursuant
to Section 2.2.1(e).
"Transferee" is defined in Section 10.4.
"Transfers of Liens" means an absolute assignment of note
and liens (including, without limitation, all mortgages and any
other security for each of the Assigned Loans) or other similar
document transferring a lien or security interest, executed by
any Borrower and/or any Guarantor to Administrative Agent, for
the benefit of the Lenders with respect to any Assigned Loan, in
form reasonably acceptable to Administrative Agent (which
document may also be referred to as an "Assignment of Lien" in
certain states).
"Type" means, with respect to any Advance or Loan, its
nature as a Floating Rate Portion or a Eurocurrency Portion.
"Underlying Real Estate" means the real property, together
with all improvements thereon, which secures any of the Assigned
Loans or any one of such parcels of real property.
"Unfunded Liabilities" means the amount (if any) by which
the present value of all vested and unvested accrued benefits
under all Single Employer Plans exceeds the fair market value of
all such Plan assets allocable to such benefits, all determined
as of the then most recent valuation date for such Plans and as
if such Plans were terminated on that date.
"Warehouse Lines" means Indebtedness of any Borrower (other
than AMRESCO, it being understood and agreed that AMRESCO shall
not have, or have any liability for, any Warehouse Lines), any
Guarantor, any Excluded Subsidiary or any Foreign Subsidiary
created for the purpose of acquiring or originating loans,
leases, securities and, if approved by Administrative Agent in
its sole and absolute discretion, other asset types; provided
that (a) such loans, leases, securities or other assets are
intended to be sold, repaid or otherwise liquidated in order to
make payments on such Indebtedness, (b) such Indebtedness is
related to the lines of business of Borrowers, Guarantors and the
Foreign Subsidiaries permitted by Section 7.4, (c) any such
Indebtedness shall be fully collateralized when incurred by
assets not included in the Borrowing Base, (d) such Indebtedness
shall be non-recourse to AMRESCO, and shall be recourse only to
the Subsidiary that received proceeds from such Indebtedness and
cross-collateralized only with Indebtedness that has the same
borrower and lender, and (e) there shall exist at the time such
Indebtedness is incurred a strategy for selling or otherwise
liquidating specific collateral securing such Indebtedness in a
commercially reasonable manner within the time period typically
required in the industry (and not in a liquidation or distress
situation) and by Borrowers and their Subsidiaries for such
specific collateral, but in no event more than twelve (12) months
following its inclusion as collateral for the applicable
Indebtedness.
"Wholly-Owned Subsidiary" of a Person means (a) any
Subsidiary all of the outstanding voting securities of which
shall at the time be owned or controlled, directly or indirectly,
by such Person or one or more Wholly-Owned Subsidiaries of such
Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person, or (b) any partnership, limited
liability company, association, joint venture or similar business
organization 100% of the ownership interests having ordinary
voting power of which shall at the time be so owned or
controlled.
"Year 2000 Problem" means any significant risk that computer
hardware or software used in the Borrowers' and Guarantors'
business or operations will not in the case of any dates or time
periods occurring after December 31, 1999 function at least as
effectively as in the case of dates or time periods occurring
prior to January 1, 2000.
"Year 2000 Program" is defined in Section 6.19.
Section 1.2. Singular and Plural of Definitions . Each
term defined in the singular form in Section 1.1 shall mean the
plural thereof when the plural form of such term is used in this
Agreement, and each term defined in the plural form in
Section 1.1 shall mean the singular thereof when the singular
form of such term is used in this Agreement.
Section 1.3. Substantive Definitions . The terms,
provisions and agreements set forth in the definitions contained
in Section 1.1 shall be substantive terms of this Agreement and
fully binding on the parties hereto.
Section 1.4. Money . Unless stipulated otherwise, all
references herein or in any of the other Loan Documents to
"Dollars," "$," "money," "payments" or other similar financial or
monetary terms are references to lawful money of the United
States of America.
Section 1.5. Captions; References . The captions and
headings in this Agreement and in the table of contents hereof
are for convenience of reference only and shall not define,
affect or limit any of the terms or provisions hereof. All
references herein to Articles and Sections are, unless specified
otherwise, references to articles and sections of this Agreement.
Unless specifically indicated otherwise, all references herein to
an "Exhibit," "Annex" or "Schedule" are references to exhibits,
annexes or schedules attached hereto, all of which are
incorporated herein and made a part hereof for all purposes, the
same as if set forth fully herein, it being understood that if
any exhibit, annex or schedule attached hereto which is to be
executed and delivered contains blanks, the same shall be
completed correctly and in accordance with this Agreement prior
to or at the time of the execution and delivery thereof. The
words "herein," "hereof," "hereunder" and other similar compounds
of the word "here" when used in this Agreement shall refer to the
entire Agreement and not to any particular provision or section
unless specifically indicated otherwise. All references to
"days," or number of days, or periods comprised of days, shall
mean and refer to calendar days unless specified to be Business
Days.
Section 1.6. Accounting Terms and Determinations . Unless
otherwise specified herein, all accounting terms used herein
shall be interpreted, all accounting determinations hereunder
shall be made, and all financial statements required to be
delivered hereunder shall be prepared in accordance with
Agreement Accounting Principles.
ARTICLE II
THE CREDIT FACILITIES
Section 2.1. Commitments .
Section 2.1.1. (a) Revolving Credit Facility Advances.
From and including the date of this Agreement and prior to the
Revolving Credit Termination Date, each Revolving Lender
severally agrees, on the terms and conditions set forth in this
Agreement, to make revolving loans in Dollars to the Borrowers
from time to time in amounts not to exceed in the aggregate at
any one time outstanding the Dollar Amount of its Commitment
Percentage of the Revolving Commitment, as limited at all times
to the applicable Borrowing Base then in effect (the "Revolving
Credit Facility"), less the sum of such Lender's Commitment
Percentage of the Facility Letter of Credit Exposure, the
Facility FX Exposure and outstanding Swingline Advances at the
time in question. Subject to and upon the terms of this
Agreement, the Borrowers may borrow, repay and reborrow under the
Revolving Credit Facility at any time prior to the Revolving
Credit Termination Date. The commitment of each Revolving Lender
to lend hereunder shall expire on the Revolving Credit
Termination Date. The Revolving Credit Facility shall be used
solely for (i) prior to and on the Transition Date, general
corporate purposes in the ordinary course of business (excluding
payment of any portion of the Lend Lease Required Payment), and
(ii) following the Transition Date, for (A) general corporate
purposes in the ordinary course of business related to the
Continuing Operations, (B) certain specifically designated
fundings for the Discontinued Operations related to foreign
exchange contracts, (C) certain specifically designated fundings
to cover loan commitments and related cost overruns of the
Discontinued Operations (including the SREP Additional Fundings)
and other operating expenses incurred in the ordinary course of
business related to the Discontinued Operations, and
(D) severance, transition and related costs to be paid in
connection with the Discontinued Operations, and (iii) at any
time, (A) Facility Letters of Credit in accordance with
Section 2.1.1(b) and (B) funding of Settlement Payments under
Facility Foreign Currency Exchange Agreements in accordance with
Section 2.1.5.
(b) Facility Letters of Credit. Facility Letters of
Credit may be issued by the Issuing Lender for the account of any
Borrower or any Guarantor for any of the purposes for which
a Borrower can obtain an Advance under the Revolving Credit
Facility; provided that, (i) each such Facility Letter of Credit
shall be issued on a Business Day occurring prior to the
Revolving Credit Termination Date, (ii) after the issuance of any
such Facility Letter of Credit (A) the Facility Letter of Credit
Exposure shall not exceed prior to and on the Lend Lease Closing
Date, Twenty Million and No/100 Dollars ($20,000,000), and
following such date, Ten Million and No/100 Dollars
($10,000,000), and (B) the Facility Letter of Credit Exposure,
plus the outstanding balance of the Advances under the Revolving
Credit Facility (including Swingline Advances), plus the Facility
FX Exposure shall not be greater than the Revolving Commitment
(or, if less at the time in question, the applicable Borrowing
Base), (iii) each such Facility Letter of Credit must have an
expiration date no later than one (1) year after the issuance
thereof, provided that, with respect to any Facility Letter of
Credit that has an expiration date later than thirty (30) days
prior to the Revolving Credit Termination Date, AMRESCO or the
applicable Borrower or Guarantor shall, on or before the 30th day
prior to the Revolving Credit Termination Date, deposit with
Administrative Agent in a blocked account held as security for
the Obligations, pursuant to an Account Assignment executed by
AMRESCO and any other applicable Borrower or Guarantor, and
otherwise on terms acceptable to Administrative Agent, an amount
designated by Administrative Agent up to the maximum stated
amount of such Facility Letter of Credit, with the understanding
that unless a Default or Event of Default is continuing, any such
deposited funds related to a specific Facility Letter of Credit
will be released to AMRESCO (or the applicable Borrower or
Guarantor) upon the expiration and return of such Facility Letter
of Credit. Each such Facility Letter of Credit shall be
denominated in Dollars. In addition to the foregoing, the
issuance and drawings under each Facility Letter of Credit shall
be subject to and in accordance with the provisions of
Section 2.16. To the extent that funds are ever drawn under any
of the Facility Letters of Credit, each such draw will be paid by
the Issuing Lender in Dollars, and, if such draw is not
reimbursed by Borrowers and by the time and as required in
Section 2.16, the Revolving Lenders will make an Advance (pro
rata in accordance with each Revolving Lender's Commitment
Percentage) in the amount so paid by the Issuing Lender to
reimburse the Issuing Lender for such draw, in accordance with
the terms of Section 2.16.
Section 2.1.2. Term Loan A. Each Term Loan A Lender
severally agrees, on the terms and conditions set forth in this
Agreement, to renew and extend to the Term Loan Facilities
Maturity Date its portion of the Term Facility under and as
defined in the Existing Credit Agreement as its portion of Term
Loan A, in Dollars only, in the amount as shown on the Commitment
Schedule.
Section 2.1.3. Term Loan B. Each Term Loan B Lender
severally agrees, on the terms and conditions set forth in this
Agreement, to renew and extend to the Term Loan Facilities
Maturity Date the portion of its Revolving Loan Commitment Amount
under and as defined in the Existing Credit Agreement outstanding
on the date hereof, refinanced hereunder in Dollars only, as its
portion of Term Loan B, in the amount as shown on the Commitment
Schedule. Borrowers and Guarantors understand and agree that
even though under the Existing Credit Agreement the outstanding
indebtedness being renewed as Term Loan B was a portion of the
revolving credit facility thereunder, Term Loan B is not a
revolving credit facility and Borrowers and Guarantors shall not
be entitled to reborrow any amounts paid on Term Loan B.
Section 2.1.4. Swingline Commitment. (a) Subject to
the terms and conditions of this Agreement, Swingline Lender
agrees to make Swingline Advances to Borrowers in Dollars from
time to time from the date of this Agreement through the
Revolving Credit Termination Date; provided, that the aggregate
principal amount of all outstanding Swingline Advances (after
giving effect to any amount requested), shall not exceed the
lesser of (i) the Revolving Commitment less the sum of all
outstanding Advances under the Revolving Credit Facility and the
Facility Letter of Credit Exposure and the Facility FX Exposure
(and limited at all times to the Borrowing Base) and (ii) the
Swingline Commitment. Swingline Advances shall be refunded by
the Revolving Lenders on demand by Swingline Lender. Such
refundings shall be made by the Revolving Lenders in accordance
with their respective Commitment Percentages and shall thereafter
be reflected as Advances under the Revolving Credit Facility of
the Revolving Lenders on the books and records of the
Administrative Agent. Each Revolving Lender shall fund its
respective Commitment Percentage of Advances as required to repay
Swingline Advances outstanding to the Swingline Lender upon
demand by the Swingline Lender but in no event later than 2:00
p.m. (Dallas time) on the next succeeding Business Day after such
demand is made. No Revolving Lender's obligation to fund its
respective Commitment Percentage of a Swingline Advance shall be
affected by any other Revolving Lender's failure to fund its
Commitment Percentage of a Swingline Advance, nor shall any
Revolving Lender's Percentage be increased as a result of any
such failure of any other Revolving Lender to fund its Commitment
Percentage.
(b) Borrowers shall pay to Swingline Lender on demand
the amount of any Swingline Advances to the extent amounts
received from the Revolving Lenders are not sufficient to repay
in full the outstanding Swingline Advances requested or required
to be refunded.
(c) Each Revolving Lender acknowledges and agrees that
its obligation to refund Swingline Advances in accordance with
the terms of this Section 2.1.4 is absolute and unconditional and
shall not be affected by any circumstance whatsoever (including,
without limitation, repayment of such Swingline Advances by
Borrowers pursuant to the above paragraph if the same is required
to be refunded to Borrowers by Swingline Lender; provided, that
if prior to the refunding of any outstanding Swingline Advance
pursuant to this Section 2.1.4, one of the events described in
Section 8.1.6 or 8.1.7 shall have occurred, each Revolving Lender
will, on the date the applicable Advance under the Revolving
Credit Facility would have been made, purchase an undivided
participating interest in the Swingline Advance to be refunded in
an amount equal to its Commitment Percentage of the aggregate
amount of such Swingline Advance). Each Revolving Lender will
immediately transfer to the Swingline Lender, in immediately
available funds, the amount of its participation, and upon
receipt thereof the Swingline Lender will deliver to such
Revolving Lender a certificate evidencing such participation
dated the date of receipt of such funds and for such amount.
Section 2.1.5. Facility Foreign Currency Exchange
Agreements. (a) Due to the continued need for the Borrowers and
the Guarantors to have funds available in certain foreign
currencies from time to time, any one or more of the Revolving
Lenders or Affiliates of Revolving Lenders (but not to exceed two
Revolving Lenders or Affiliates of Revolving Lenders at any one
time) may enter into one or more Facility Foreign Currency
Exchange Agreements with AMRESCO, together with any other
applicable Borrowers or Guarantors, relating to any Eligible
Currencies, such agreements to be non-speculative foreign
currency spot purchases, foreign currency swap contracts or
foreign currency forward contracts only, and to be generally in
the form of and on terms comparable to foreign currency exchange
agreements customarily entered into by major national banks for
foreign currency transactions similar to those entered into with
AMRESCO, such as the International Foreign Exchange and Options
Master Agreement ("FEOMA") promulgated by the Foreign Exchange
Committee in association with the British Bankers Association,
the Canadian Foreign Exchange Committee and the Tokyo Foreign
Exchange Market Practices Committee, and documents ancillary
thereto, and to have a final termination or settlement date on or
before the Revolving Credit Facility Termination Date. The
maximum Facility FX Exposure under all Facility Foreign Currency
Exchange Agreements shall not at any time exceed $10,000,000, as
determined daily by Administrative Agent based on information
furnished to Administrative Agent from each FX Lender pursuant to
Section 2.1.5(b). Borrowers and Lenders agree that the amount of
the Revolving Commitment available for Advances, Swingline
Advances and Facility Letters of Credit under the Revolving
Credit Facility shall be reduced by the aggregate amount of the
Facility FX Exposure under all such Facility Foreign Currency
Exchange Agreements, as determined daily by Administrative Agent
based on information furnished to Administrative Agent from each
FX Lender pursuant to Section 2.1.5(b), up to a maximum amount of
$10,000,000. No Facility Foreign Currency Exchange Agreement
shall be entered into if immediately prior to or upon the
entering into of such agreement, the aggregate amount of the
Facility FX Exposure, plus the outstanding balance of the
Advances under the Revolving Credit Facility (including Swingline
Advances), plus the Facility Letter of Credit Exposure, would
exceed the Revolving Commitment (or, if less at the time in
question, the applicable Borrowing Base).
(b) Any Lender or Affiliate of a Lender desiring to enter
into a Facility Foreign Currency Exchange Agreement must give to
Administrative Agent prior notice (in a manner deemed sufficient
by Administrative Agent) of the type and terms of such proposed
agreement, the stated maximum amount of the foreign currency
exchange agreement and the maximum Dollar Amount of the potential
settlement obligations thereunder. Administrative Agent shall
have the right to accept or reject such agreement as a Facility
Foreign Currency Exchange Agreement, such acceptance not to be
unreasonably withheld if such agreement satisfies the conditions
hereof and would not result in noncompliance with the applicable
terms of this Agreement, including without limitation
Section 2.1.5(a). If any such accepted agreement is entered
into, the applicable FX Lender and AMRESCO shall notify
Administrative Agent thereof, and shall provide such information
regarding the final terms of the subject Facility Foreign
Currency Exchange Agreement as Administrative Agent shall
reasonably request. Each FX Lender shall notify Administrative
Agent of any termination of a Facility Foreign Currency Exchange
Agreement, or of any default or breach thereunder, or at any time
that the maximum amount of potential settlement obligations
related thereto (or the portion of the Facility FX Exposure
attributable thereto) exceeds or is likely to exceed, or is
otherwise changed from, the amount previously disclosed to
Administrative Agent.
(c) At any time that an FX Lender is obligated to make any
payment to settle any Facility Foreign Currency Exchange
Agreement (a "Settlement Payment"), which payment is not made by,
or immediately reimbursed by, AMRESCO or any other applicable
Borrower or Guarantor to the applicable FX Lender, the Revolving
Lenders agree to make an Advance in Dollars to refund such
Settlement Payment on demand from the FX Lender, any such Advance
to be made pro rata in accordance with the Revolving Lenders'
Commitment Percentages, but limited in any event, and,
notwithstanding anything to the contrary expressed or implied
herein, for each Revolving Lender, to an amount that would not
exceed such Revolving Lender's Commitment Percentage of the
Facility FX Exposure or, taken together with all other amounts
outstanding under such Revolving Lender's Commitment Amount,
would not in any case exceed such Revolving Lender's Commitment
Amount. Any such Advance shall thereafter be reflected as an
Advance under the Revolving Credit Facility on the books and
records of the Administrative Agent. Each Revolving Lender shall
fund its respective Commitment Percentage of each such Advance as
required to reimburse any Settlement Payment made by the
applicable FX Lender upon demand by such FX Lender, but in no
event later than 2:00 p.m. (Dallas time) on the next succeeding
Business Day after such demand is made. No Revolving Lender's
obligation to fund its respective Commitment Percentage of an
Advance to reimburse a Settlement Payment shall be affected by
any other Revolving Lender's failure to fund its Commitment
Percentage thereof, nor shall any Revolving Lender's Commitment
Percentage be increased as a result of any such failure of any
other Revolving Lender to fund its Commitment Percentage.
(d) Borrowers shall pay to the applicable FX Lender on
demand the amount of any Settlement Payment to the extent amounts
received from the Revolving Lenders are not sufficient to
reimburse in full the Settlement Payment requested or required to
be refunded.
(e) Each Revolving Lender acknowledges and agrees that
its obligation to fund its portion of an Advance to reimburse
amounts advanced by an FX Lender to make a Settlement Payment in
accordance with the terms of this Section 2.1.5 is absolute and
unconditional and shall not be affected by any noncompliance with
any applicable condition set forth in Article IV or any other
circumstance whatsoever (including without limitation repayment
of such Settlement Payment by Borrowers pursuant to the above
paragraph if the same is required to be refunded to Borrowers by
such FX Lender); provided, that if prior to the refunding of any
outstanding Settlement Payment pursuant to this Section 2.1.5,
one of the events described in Section 8.1.6 or 8.1.7 shall have
occurred, each Revolving Lender will, on the date the applicable
Advance under the Revolving Credit Facility would have been made,
purchase an undivided participating interest in the Settlement
Payment(s) to be reimbursed in an amount equal to the portion of
such Advance it would have made but for the provisions of this
Section 2.1.5(e). Each Revolving Lender will immediately
transfer to the applicable FX Lender, in Dollars and in
immediately available funds, the amount of its participation and
upon receipt thereof the applicable FX Lender will deliver to
such Revolving Lender a certificate evidencing such participation
dated the date of receipt of such funds and for such amount. In
the event that any Revolving Lender fails to make available to
Administrative Agent for the account of the applicable FX Lender
the amount of any Settlement Payment(s) as provided herein, the
applicable FX Lender shall be entitled to recover such amount on
demand from such Revolving Lender together with interest thereon
at a rate per annum equal to the lesser of (i) the Maximum Lawful
Rate or (ii) the Federal Funds Effective Rate.
Section 2.2. Required Payments; Termination .
Section 2.2.1. Scheduled Term Loan Payments. In
addition to the interest payments required by Section 2.19,
Borrowers shall make the following principal payments on Term
Loan A and Term Loan B (to be allocated between them as provided
in Section 2.7(b)):
(a) On or before the earlier of February 29, 2000, or
the Lend Lease Closing Date, a principal payment in the amount of
the Lend Lease Required Payment. The Lend Lease Required Payment
shall come from Lend Lease Net Proceeds, and if Lend Lease Net
Proceeds are not sufficient to make such payment (or there are no
Lend Lease Net Proceeds because the Lend Lease Agreement has not
closed or has terminated), from proceeds of Collateral or other
funds of the Borrowers which shall not in any event include any
proceeds from the sale of Assigned Loans in the Structured Real
Estate Portfolio or funds from an Advance under the Revolving
Credit Facility.
(b) Within three (3) Business Days after it can be
determined that all or any portion of the funds in the Lend Lease
Post Closing Adjustment Account will not be required to be paid
by the sellers to the purchaser under the Lend Lease Agreement
pursuant to Section 3.3 thereof, a principal payment in an amount
equal to 95% (or 85% if neither the SREP Sale Date nor Structured
Real Estate Asset Sales for all or substantially all of the SREP
Assets have occurred, with such 10% difference being included in
the Lend Lease Deferral) of the amount of such funds, which
payment may be made from the funds initially deposited in the
Lend Lease Post-Closing Adjustment Account, less any funds from
such account that have been paid, or are still subject to
disagreement as to whether such funds are to be paid, to the
purchasers under the Lend Lease Agreement pursuant to and as
defined in Section 3.3 thereof. Borrowers agree to furnish to
Administrative Agent such information as Administrative Agent may
reasonably request from time to time regarding the status of the
post-closing adjustments under the Lend Lease Agreement to
confirm the time and amount of any payments required under this
Section 2.2.1(b). As used above in this Section 2.2.1(b) (and
specifically referred to in other Sections of this Agreement),
"substantially all" means (i) SREP Assets that have in the
aggregate, for (A) Assigned Loans, an aggregate principal
balance, and (B) for other SREP Assets, an aggregate book value,
with a combined total exceeding 80% of the sum of the aggregate
principal balance of all Assigned Loans and aggregate book value
of the other SREP Assets in the Structured Real Estate Portfolio,
as shown on Schedule 14, or (ii) if fewer, the SREP Assets sold
in the SREP-Ocwen Sale.
(c) On any SREP Required Payment Date, a principal
payment in the amount of the applicable SREP Required Payment,
less (i) the balance of any SREP Additional Fundings that is paid
on the Revolving Credit Facility (it being understood and agreed
that the net balance of all SREP Additional Fundings shall be
paid before application to the Term Loan Facilities of any SREP
Required Payment or other payment from a SREP Asset), and (ii) if
the Lend Lease Closing Date has not occurred, the amount, if any,
necessary to make any payment required on the Revolving Credit
Facility due to the reduction of the Revolving Commitment as
provided in Section 2.17.1(b) (it being understood and agreed
that the reduction to the Revolving Commitment pursuant to
Section 2.17.1(b) shall be taken into account in determining the
Balancing Ratio for allocation of the payment to the Lenders on
the SREP Sale Date); provided that in the case that the SREP Sale
Date (or the completion of Structured Real Estate Asset Sales for
all or substantially all [as defined in Section 2.2.1(b)] of the
SREP Assets) occurs after the Lend Lease Closing Date, an
additional principal payment in the amount of the Lend Lease
Deferral shall be made.
(d) On any day that a principal payment is made on the
Lend Lease Holdback Note, an amount equal to 95% of such payment
(or 85% of such payment if neither the SREP Sale Date nor
Structured Real Estate Asset Sales for all or substantially all
[as defined in Section 2.2.1(b)] of the SREP Assets have
occurred, with such 10% difference being included in the Lend
Lease Deferral).
(e) On or before March 30, 2000, a principal payment
in the amount of $70,000,000 less the aggregate amount of all
SREP Required Payments made prior to such date and all principal
payments on the Term Loan Facilities made prior to such date
pursuant to Sections 2.2.2 or 2.2.4 or otherwise, but expressly
excluding all payments made pursuant to Sections 2.2.1(a), (b),
and (d).
(f) The entire outstanding principal balance of, and
all accrued interest on, and any other amounts owing with respect
to, Term Loan A and Term Loan B shall be due and payable in full
on the Term Loan Facilities Maturity Date.
Section 2.2.2. Other Term Facility Mandatory Principal
Payments. In addition to the principal payments provided for
above in Section 2.2.1 and below in Section 2.2.4, Borrowers
shall pay, or cause to be paid, to Administrative Agent for the
account of the Term Lenders proceeds from the sales of assets as
set forth in Section 7.13 and as required for releases of
Collateral pursuant to Section 5.7 (without duplication of the
amounts required to be paid thereunder), and all other proceeds
paid or realized on assets of any Borrower, Guarantor or
Subsidiary, but excluding proceeds from the sale of, or otherwise
paid or realized on, assets of the Subsidiaries engaged in
Continuing Operations in the ordinary course of business and for
which the net investment value thereof on the books of AMRESCO is
greater than $0, and as otherwise provided in the Specified Asset
Release Agreement.
Section 2.2.3. Revolving Credit Facility Payments;
Termination. (a) On any SREP Required Payment Date, Borrowers
shall pay to Administrative Agent, for the benefit of the
Revolving Lenders, an amount equal to the unpaid balance of the
SREP Additional Fundings as shown on the most recent Borrowing
Base Certificate (but limited to the amount of the applicable
SREP Required Payment, if less) , which amount shall be applied
to the outstanding principal amount of the Advances under the
Revolving Credit Facility.
(b) Upon the sale of the assets of, or the stock of,
the Subsidiaries whose business is AMRESCO's line of business
referred to as its "Builders Group", Borrowers shall pay to
Administrative Agent, for the account of the Revolving Lenders,
on the closing date of such sale, the amount, if any, by which
the outstanding principal balance of all Advances as of such date
exceeds the Revolving Commitment after taking into account the
$5,000,000 permanent reduction to the Revolving Credit Facility
required under Section 2.17.1(a), any such payment to be applied
to such outstanding Advances.
(c) If the SREP Sale Date with respect to the
Structured Real Estate Portfolio Sale occurs prior to the Lend
Lease Closing Date, Borrowers shall pay to Administrative Agent,
for the account of the Revolving Lenders on the SREP Sale Date,
the amount, if any, by which the outstanding principal balance of
all Advances as of such date exceeds the Revolving Commitment
after taking into account the $10,000,000 reduction to the
Revolving Credit Facility required under Section 2.17.1(b), any
such payment to be applied to such outstanding Advances.
(d) On the Revolving Credit Termination Date,
Borrowers shall pay to Administrative Agent for the account of
each Revolving Lender, the outstanding principal balance of the
Advances under the Revolving Credit Facility, together with all
accrued but unpaid interest, and any unpaid fees and expenses
relating thereto. Any outstanding Advances under the Revolving
Credit Facility and all other unpaid Obligations relating thereto
shall be paid in full by the Borrowers on the Revolving Credit
Termination Date, subject to Section 2.1(b) with respect to
outstanding Facility Letter of Credit Exposure at such time.
Section 2.2.4. Borrowing Base Deficiency Payments.
(a) If, prior to the Transition Date, on any date required for
delivery of the Borrowing Base Certificate pursuant to
Section 7.1(ix), the Borrowing Base Coverage Ratio is not in
compliance with the requirement of Section 7.24.4(a) with respect
to all the Credit Facilities (as calculated pursuant to
Schedule 10), Borrowers shall within two (2) Business Days after
such date make a principal payment in the amount of such
deficiency to Administrative Agent, which amount shall be applied
to the Revolving Credit Facility, to the extent such deficiency
is attributable to assets of the Subsidiaries engaged in
Continuing Operations, and otherwise to the Term Loan Facilities
to be applied as provided in Section 2.7(b).
(b) If, after the Transition Date, on any date
required for delivery of the Borrowing Base Certificate pursuant
to Section 7.1(ix), the Borrowing Base Coverage Ratio is not in
compliance with the requirement of Section 7.24.4(b) with respect
to the Revolving Credit Facility (calculated pursuant to
Schedule 11), Borrowers shall within two (2) Business Days after
such date make a principal payment in the amount of such
deficiency to Administrative Agent, which amount shall be applied
to the Revolving Credit Facility.
(c) If, after the Transition Date, on any date
required for delivery of the Borrowing Base Certificate pursuant
to Section 7.1(ix), the Borrowing Base Coverage Ratio is not in
compliance with the requirements of Sections 7.24.4(c) or (d), as
applicable, with respect to the Term Loan Facilities (calculated
pursuant to Schedule 12), Borrowers shall within two (2) Business
Days after such date make a principal payment in the amount of
such deficiency to Administrative Agent, which amount shall be
applied to the Term Loan Facilities as provided in
Section 2.7(b).
Section 2.3. Ratable Loans. Each Advance under the
Revolving Credit Facility shall consist of Loans made in Dollars
from all the Revolving Lenders ratably in accordance with their
respective Commitment Percentages.
Section 2.4. INTENTIONALLY OMITTED.
Section 2.5. Commitment Fee; Facility Letter of Credit
Fees; Facility FX Fees.
Section 2.5.1. Commitment Fee. The Borrowers shall
pay to Administrative Agent for the account of the Revolving
Lenders a nonrefundable commitment fee (the "Commitment Fee") in
an amount equal to the product of (a) the applicable per annum
percentage rate in effect as the Applicable Fee Rate for the
Commitment Fee as shown on the Pricing Schedule, calculated as
provided in Section 2.20, times (b) the average daily unused
portion of the Revolving Commitment (after adjustment for
Facility Letter of Credit Exposure and Facility FX Exposure, but
not including any reduction for Swingline Advances), from the
date hereof to and including the Revolving Credit Termination
Date. The Commitment Fee is to be paid for the account of each
Revolving Lender in accordance with its Commitment Percentage,
and shall be payable on each Payment Date for the preceding
calendar month, and on the Revolving Credit Termination Date.
Section 2.5.2. Facility Letter of Credit Fees. The
Borrowers shall pay to the Issuing Lender a letter of credit
fronting fee for each Facility Letter of Credit, in an amount
agreed to between AMRESCO and the Issuing Lender by separate
agreement, in consideration of the issuance of such Facility
Letter of Credit. In addition, Borrowers shall pay to
Administrative Agent for the account of the Revolving Lenders a
letter of credit fee (the "Facility Letter of Credit Fee") as a
condition to the issuance of any Facility Letter of Credit (or
extension thereof) in an amount equal to the applicable per annum
percentage rate then in effect as the Applicable Fee Rate for the
Facility Letter of Credit Fee, calculated as provided in
Section 2.20, times the maximum stated amount of the Facility
Letter of Credit so issued. The Facility Letter of Credit Fee,
shall be paid for the account of each Revolving Lender in
accordance with its Commitment Percentage and shall be payable on
the date of issuance of the applicable Facility Letter of Credit
(and if extended, on the date of extension).
Section 2.5.3. Facility FX Fee. The Borrowers shall pay to
Administrative Agent for the account of the Revolving Lenders a
fee (the "Facility FX Fee") in an amount equal to the product of
(a) the applicable per annum percentage rate in effect as the
Applicable Fee Rate for the Facility FX Fee, calculated as
provided in Section 2.20, times (b) the average daily FX Exposure
in effect on each day from day to day. The Facility FX Fee is to
be paid for the account of each Revolving Lender in accordance
with its Commitment Percentage, and shall be payable on each
Payment Date for the preceding calendar month, and on the
Revolving Credit Termination Date.
Section 2.6. Minimum Amount of Each Advance. Each
Advance shall be in the minimum amount of $1,000,000 and in
multiples of $100,000 if in excess thereof; provided, however,
that any Advance may be in the amount of the unused Revolving
Commitment.
Section 2.7. Optional Principal Payments; Allocation of
Payments. (a) The Borrowers may from time to time pay, without
penalty or premium, all outstanding Advances and the outstanding
principal balance of Term Loan A and Term Loan B, or, in a
minimum aggregate amount of $1,000,000 or any integral multiple
of $100,000 in excess thereof, any portion of the outstanding
Advances or the outstanding principal under the Term Loan
Facilities upon notice to Administrative Agent prior to 10:00
a.m. (Dallas, Texas time) on the date on which such prepayment is
to be made, subject to Section 2.7(b). All voluntary principal
prepayments on Term Loan A and Term Loan B shall be applied to
principal due in the inverse order of maturity.
(b) Any voluntary payment on Term Loan A or Term Loan
B under this Section 2.7, and any mandatory payments on Term Loan
A or Term Loan B under Sections 2.2.1, 2.2.2, or 2.2.4, or
otherwise, shall be allocated between Term Loan A and Term Loan B
(notwithstanding any contrary designation by Borrowers) such that
the Balancing Ratio prior to such payment is equal to the
Balancing Ratio after giving effect to such payment. To the
extent that the outstanding balance of Term Loan B is $0.00, any
principal payments which would otherwise be allocated to Term
Loan B pursuant to the preceding sentence shall instead be used
to pay down the Revolving Credit Facility (and such amounts shall
be a permanent reduction in the Revolving Commitment). In
addition, any reduction in the Revolving Commitment required or
permitted under Section 2.17 or otherwise required hereunder
shall be accompanied by a payment (a "Balancing Payment") on Term
Loan A in an amount sufficient to cause the Balancing Ratio prior
to such reduction and payment to be equal to the Balancing Ratio
after giving effect to such reduction and payment. Payments on
Term Loan A and Term Loan B shall be allocated among the Term
Loan A Lenders and among the Term Loan B Lenders in accordance
with their respective Term Loan A Percentages and Term Loan B
Percentages.
Section 2.8. Method of Borrowing. AMRESCO shall give
the Administrative Agent irrevocable notice (a "Borrowing
Notice") in the form attached hereto as Exhibit A not later than
10:00 a.m. (Dallas, Texas time) on the Business Day that is the
Borrowing Date for each Advance requested by Borrowers,
specifying:
(a) the Borrowing Date, which shall be a Business
Day, of such Advance;
(b) the aggregate amount of such Advance; and
(c) the purpose of such Advance.
Not later than noon (Dallas, Texas time) on each Borrowing Date,
each Revolving Lender (or the Swingline Lender, if applicable)
shall make available its pro rata portion of such Advance in
accordance with its Commitment Percentage in Dollars and in funds
immediately available in Dallas, Texas to the Administrative
Agent at its address specified in Schedule 1. Unless the
Administrative Agent determines that any applicable condition
specified in Article IV has not been satisfied, Administrative
Agent will make the funds so received from the Revolving Lenders
or Swingline Lender, as applicable, available to Borrowers prior
to 2:00 p.m., Dallas, Texas time on the requested Borrowing Date
by (i) transferring such amounts by wire transfer pursuant to
AMRESCO's instructions, or (ii) in the absence of such
instructions, crediting such amounts to the operating account of
AMRESCO maintained with Administrative Agent.
Section 2.9. INTENTIONALLY OMITTED.
Section 2.10. INTENTIONALLY OMITTED .
Section 2.11. Interest Rate. Interest shall accrue on the
outstanding principal balance of all Loans under all the Credit
Facilities for each day at a rate per annum equal to the lesser
of (a) the Applicable Rate for such day (subject to the
provisions of Section 11.7), and (b) the Maximum Lawful Rate;
provided, however, if at any time the Applicable Rate exceeds the
Maximum Lawful Rate, resulting in the charging of interest
hereunder to be limited to the Maximum Lawful Rate, then any
subsequent reduction in the Applicable Rate shall not reduce the
rate of interest below the Maximum Lawful Rate until the total
amount of interest accrued on the indebtedness hereunder equals
the amount of interest which would have accrued on such
indebtedness if the Applicable Rate had at all times been in
effect. Changes in the Applicable Rate will take effect
simultaneously with each change in the Corporate Base Rate, and
with each increase in the Applicable Base Rate Margin as set
forth in the Pricing Schedule.
Section 2.12. Rates Applicable After Default.
Notwithstanding anything herein to the contrary, during the
continuance of a Default or Event of Default the Required Lenders
may, at their option, by notice from Administrative Agent to
AMRESCO (which notice may be revoked at the option of the
Required Lenders notwithstanding the provisions of
Section 11.3(a)(i) requiring unanimous consent of the Lenders for
reductions in interest rates), declare that the outstanding
principal balance of all Loans shall bear interest at a rate per
annum equal to the Default Rate; provided that, during the
continuance of an Event of Default under Section 8.1.6 or 8.1.7,
the Default Rate shall be applicable to all Loans without any
election or action on the part of the Administrative Agent or any
Lender.
Section 2.13. Method of Payment. All payments of Advances
under the Revolving Credit Facility and principal payments on the
Term Loan Facilities, and all payments of interest thereon, and
payment of all other Obligations shall be made in Dollars. All
payments of the Obligations hereunder shall be made, without
setoff, deduction, or counterclaim, in immediately available
funds to the Administrative Agent at (except as set forth in the
next sentence) the Administrative Agent's address specified in
Schedule 1, or at any other Lending Installation of the
Administrative Agent specified in writing by the Administrative
Agent to AMRESCO, by noon (local time) on the date when due and
shall be applied by the Administrative Agent ratably to the
Lenders entitled thereto. Each payment delivered to the
Administrative Agent for the account of any Lender shall be
delivered promptly by the Administrative Agent to such Lender at
such Lender's address specified pursuant to Schedule 1 or at any
Lending Installation or other address specified in a notice
received by the Administrative Agent from such Lender. The
Administrative Agent is hereby authorized to charge any account
of any Borrower maintained with Bank of America or any of its
Affiliates for each payment of principal, interest and fees as it
becomes due hereunder.
Section 2.14. Continuation of Contract. Neither the
implementation nor change in currency as a result of the
commencement of the third stage of European Economic and Monetary
Union nor any economic consequences resulting therefrom shall
(i) give rise to any right to terminate prematurely, contest,
cancel, rescind, alter, modify or renegotiate the provisions of
this Agreement or (ii) discharge, excuse or otherwise affect the
performance of any obligations of any Borrower or any Guarantor
under this Agreement or the other Loan Documents.
Section 2.15. Evidence of Indebtedness. (a) Borrowers
shall execute and deliver to each Term Loan A Lender a Term Loan
A Note payable to the order of such Lender, in the amount of such
Lender's Term Loan A Percentage of Term Loan A.
(b) Borrowers shall execute and deliver to each Term
Loan B Lender a Term Loan B Note payable to the order of such
Lender, in the amount of such Lender's Term Loan B Percentage of
Term Loan B.
(c) Borrowers shall execute and deliver to each
Revolving Lender a Revolving Note payable to the order of such
Lender, in the amount of such Lender's Commitment Amount.
(d) Borrowers shall execute and deliver to Swingline
Lender the Swingline Note payable to the order of Swingline
Lender, in the amount of the Swingline Commitment.
Section 2.16. Method of Issuing Facility Letters of Credit.
(a) Not less than three (3) Business Days prior to the requested
date of issuance of any Facility Letter of Credit, AMRESCO shall
deliver to Administrative Agent a Borrowing Notice and shall
execute and deliver to the Issuing Lender the customary letter of
credit application and agreement used by the Issuing Lender (the
"LOC Application"). Nothing in this Agreement shall prohibit the
Issuing Lender from modifying the form of LOC Application in
effect from time to time in connection with the issuance of any
Facility Letter of Credit. In the event of a direct conflict
between the provisions of the LOC Application and this Agreement,
the provisions of this Agreement shall govern. Each Facility
Letter of Credit shall be a standby letter of credit only issued
on behalf of a Borrower or a Guarantor, and shall comply with all
requirements for Facility Letters of Credit set forth in
Section 2.1.1(b). Upon satisfaction of the conditions precedent
to Advances set forth in Sections 4.2 and 4.3, and subject to the
other terms and conditions of this Agreement, the Issuing Lender
shall issue the requested Facility Letter of Credit for the
account of such Borrower or Guarantor within three (3) Business
Days from receipt by the Issuing Lender of the fully-executed LOC
Application (so long as the requested terms of such Facility
Letter of Credit are acceptable to the Issuing Lender in its sole
discretion).
(b) Immediately upon the issuance of each Facility
Letter of Credit, the Issuing Lender shall be deemed to have sold
and transferred to each Revolving Lender, and each Revolving
Lender shall be deemed to have purchased and received from the
Issuing Lender, in each case irrevocably and without any further
action by any party, an undivided interest and participation in
such Facility Letter of Credit, each drawing thereunder and the
obligations of any Borrower or Guarantor under this Agreement in
respect thereof in an amount equal to the product of (i) such
Revolving Lender's Commitment Percentage times (ii) the maximum
amount available to be drawn under such Facility Letter of Credit
(assuming compliance with all conditions to drawing). Within the
limits of this Agreement, and subject to the limits set forth in
Section 2.1.1(b), AMRESCO may through an Authorized Officer
request the issuance of Facility Letters of Credit under this
Section 2.16, repay any Advances resulting from drawings
thereunder pursuant to this Section 2.16 and request the issuance
of additional Facility Letters of Credit under this Section 2.16.
(c) Borrowers unconditionally agree to pay to the
Issuing Lender (and the LOC Application shall so provide) all
amounts drawn under and payable to Issuing Lender under or in
connection with any Facility Letter of Credit immediately when
due (and in any event shall reimburse any Issuing Lender for
drawings under a Facility Letter of Credit no later than 10:00
a.m. on the Business Day after payment by the Issuing Lender),
irrespective of any claim, set-off, defense or other right which
any Borrower, any Guarantor, or any other Subsidiary or any
other account party may have at any time against the Issuing
Lender or any other Person, including without limitation, (i) any
lack of validity or enforceability of this Agreement or any of
the other Loan Documents; (ii) the existence of any claim,
setoff, defense or other right which any Borrower, any Guarantor,
or any Subsidiary may have at any time against a beneficiary
named in a Facility Letter of Credit or any transferee of any
Facility Letter of Credit (or any Person for whom any such
transferee may be acting), the Administrative Agent, the Issuing
Lender, any Lender, or any other Person, whether in connection
with this Agreement, any Facility Letter of Credit, the
transactions contemplated herein or any unrelated transaction
(including, without limitation, any underlying transactions
between Borrowers, Guarantors, or any Subsidiary and the
beneficiary named in any Facility Letter of Credit); (iii) any
draft, certificate or any other document presented under any
Facility Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect; (iv) the surrender or
impairment of any security for the performance or observance of
any of the terms of any of the Loan Documents; or (v) the
occurrence of any Default or Event of Default. However, nothing
in this Agreement constitutes a waiver of Borrowers' rights to
assert independently of its reimbursement obligation any claim
against Issuing Lender for its gross negligence or willful
misconduct in connection with its funding any Facility Letter of
Credit. If Borrowers fail to reimburse the Issuing Lender as
above required, the payment by the Issuing Lender of a draft
drawn under any Facility Letter of Credit shall constitute for
all purposes of this Agreement the making by the Issuing Lender
of an Advance, in Dollars, which shall bear interest at the
Applicable Rate then in effect, in the amount of such draft (but
without any requirement for compliance with the conditions set
forth in Article IV hereof). In the event that a drawing under
any Facility Letter of Credit is not reimbursed by Borrowers by
10:00 a.m. (Dallas, Texas time) on the first Business Day after
such drawing, the Issuing Lender shall promptly notify
Administrative Agent and each Revolving Lender. The Revolving
Lenders shall, on the first Business Day following such
notification, make an Advance in Dollars, which shall be used to
repay the Advance made by the Issuing Lender with respect to such
Facility Letter of Credit (but without any requirement for
compliance with the applicable conditions set forth in
Article IV) by each Revolving Lender paying to Administrative
Agent for the account of the Issuing Lender, in same day funds,
an amount equal to such Revolving Lender's Commitment Percentage
of the amount of such Advance. In the event that any Revolving
Lender fails to make available to Administrative Agent for the
account of the Issuing Lender its share of such Advance, the
Issuing Lender shall be entitled to recover such amount on demand
from such Revolving Lender together with interest thereon at a
rate per annum equal to the lesser of (i) the Maximum Lawful Rate
or (ii) the Federal Funds Effective Rate.
Section 2.17. Reductions to Revolving Commitment.
Section 2.17.1 Mandatory Reductions. The Revolving
Commitment shall be automatically reduced (a) by $5,000,000 upon
the sale of all or substantially all of the assets of (exclusive
of loan assets in the ordinary course of business), or the stock
of, the Subsidiaries whose business is AMRESCO's line of business
referred to as its "Builder's Group", and (b) by $10,000,000 on
the SREP Sale Date, if such date occurs on a date prior to the
Lend Lease Closing Date. Certain payments made on the Revolving
Credit Facility pursuant to Section 2.7(b) shall effect a
permanent reduction to the Revolving Commitment as provided
therein.
Section 2.17.2 Voluntary Reductions. AMRESCO may,
subject to any Balancing Payment required under Section 2.7(b),
permanently reduce the Revolving Commitment in whole, or in part
ratably among the Revolving Lenders in integral multiples of
$1,000,000, upon at least five (5) Business Days' written notice
to Administrative Agent, which notice shall specify the amount of
any such reduction, provided, however, that the amount of the
Revolving Commitment may not be reduced below the aggregate
principal Dollar Amount of the outstanding Advances under the
Revolving Credit Facility, all Swingline Advances, the amount of
the Facility Letter of Credit Exposure and the amount of the
Facility FX Exposure. All accrued commitment fees shall be
payable on the effective date of any termination of the
obligations of the Revolving Lenders to make Advances hereunder.
Section 2.18. Telephonic Notices. The Borrowers hereby
authorize the Lenders and the Administrative Agent to make
Advances and to transfer funds based on telephonic notices made
by any person or persons the Administrative Agent or any Lender
in good faith believes to be acting on behalf of AMRESCO, it
being understood that the foregoing authorization is specifically
intended to allow Borrowing Notices to be given telephonically.
AMRESCO agrees to deliver promptly to the Administrative Agent a
written confirmation in the form of a Borrowing Notice signed by
an Authorized Officer, of each telephonic notice. If such
written confirmation differs in any material respect from the
action taken by the Administrative Agent and the Lenders, the
records of the Administrative Agent and the Lenders shall govern
absent manifest error.
Section 2.19. Interest Payment Dates. (a) Accrued, unpaid
interest on the outstanding principal balance of all Loans
outstanding under all the Credit Facilities shall be due and
payable on each Payment Date, commencing with the first such date
to occur after the date hereof. All accrued and unpaid interest
shall be due and payable at maturity. All interest accruing
after maturity, or at any time accruing at the Default Rate,
shall be due and payable upon demand.
(b) Notwithstanding anything to the contrary herein or in
the Notes or any other Loan Document, in the event that at any
time the Eurocurrency Comparable Rate as determined for any
calendar month is higher than the Applicable Rate on any one or
more days during such calendar month, Borrowers shall pay to
Administrative Agent, for the pro rata benefit of the Lenders, on
the respective Payment Date an amount equal to difference between
(i) the amount that would have been calculated as interest on the
Loans had the Applicable Rate been equal to the higher
Eurocurrency Comparable Rate on such day(s), and (ii) the amount
of interest payable as calculated pursuant to the Applicable Rate
on such day(s) (each such payment, an "Interest Deficiency
Payment").
Section 2.20. Calculation of Interest and Fees. Interest,
the Commitment Fee and the Facility FX Fee shall be calculated
for actual days elapsed on the basis of a 360-day year. The
Facility Letter of Credit Fee shall be calculated for the actual
number of days in the term of the applicable Facility Letter of
Credit on the basis of a 360-day year. Interest shall be payable
for the day an Advance is made but not for the day of any payment
on the amount paid on a Loan if payment is received prior to noon
(local time) at the place of payment. If any payment of
principal of or interest on a Loan shall become due on a day
which is not a Business Day, such payment shall be made on the
next succeeding Business Day and, in the case of a principal
payment, such extension of time shall be included in computing
interest in connection with such payment.
Section 2.21. Notification of Advances, Interest Rates,
Prepayments and Commitment Reductions. Promptly after receipt
thereof, the Administrative Agent will notify each Revolving
Lender of the contents of each Revolving Commitment reduction
notice and each Borrowing Notice, and will notify each Term
Lender of any prepayment notice with respect to the Term Loan
Facilities received by Administrative Agent hereunder.
Section 2.22. Lending Installations. Each Lender will
book its Loans at the appropriate Lending Installation listed on
Schedule 3 or such other Lending Installation designated by such
Lender in accordance with the final sentence of this
Section 2.22. All terms of this Agreement shall apply to any
such Lending Installation and the Loans and the Notes shall be
deemed held by each Lender for the benefit of any such Lending
Installation. Each Lender may, by written notice to the
Administrative Agent and AMRESCO in accordance with Section 11.2,
designate replacement or additional Lending Installations through
which Loans will be made by it and for whose account Loan
payments are to be made.
Section 2.23. Non-Receipt of Funds by the Administrative
Agent. Unless AMRESCO or a Revolving Lender, as the case may
be, notifies the Administrative Agent prior to the date on which
the Borrowers or such Revolving Lender, as applicable, is
scheduled to make payment to the Administrative Agent of (a) in
the case of a Revolving Lender, the proceeds of an Advance or
other amount due from a Lender hereunder, or (b) in the case of
the Borrowers, a payment of principal, interest or fees to the
Administrative Agent for the account of the Lenders, that
Borrowers or such Revolving Lender, as applicable, do not intend
to make such payment, the Administrative Agent may assume that
such payment has been made. Administrative Agent may, but shall
not be obligated to, make the amount of such payment available to
the intended recipient in reliance upon such assumption. If such
Revolving Lender or the Borrowers, as the case may be, have not
in fact made such payment to the Administrative Agent, the
recipient of such payment shall, on demand by the Administrative
Agent, repay to the Administrative Agent the amount so made
available together with interest thereon in respect of each day
during the period commencing on the date such amount was so made
available by the Administrative Agent until the date the
Administrative Agent recovers such amount at a rate per annum
equal to (i) in the case of payment by a Revolving Lender, the
Federal Funds Effective Rate for such day for the first three
days and, thereafter, the Applicable Rate or (ii) in the case of
payment by the Borrowers, the Applicable Rate or, if and when
applicable, the Default Rate.
Section 2.24. INTENTIONALLY OMITTED.
Section 2.25. Judgment Currency. If for the purposes of
obtaining judgment in any court it is necessary to convert a sum
due from any Borrower or any Guarantor hereunder in the currency
expressed to be payable herein (the "specified currency") into
another currency, the parties hereto agree, to the fullest extent
that they may effectively do so, that the rate of exchange used
shall be that at which in accordance with normal banking
procedures the Administrative Agent could purchase the specified
currency with such other currency at the Administrative Agent's
main Dallas, Texas office on the Business Day preceding that on
which a final, non-appealable judgment is given. The obligations
of any Borrower or any Guarantor in respect of any sum due to any
Lender or the Administrative Agent hereunder shall,
notwithstanding any judgment in a currency other than the
specified currency, be discharged only to the extent that on the
Business Day following receipt by such Lender or the
Administrative Agent (as the case may be) of any sum adjudged to
be so due in such other currency such Lender or the
Administrative Agent (as the case may be) may in accordance with
normal, reasonable banking procedures purchase the specified
currency with such other currency. If the amount of the
specified currency so purchased is less than the sum originally
due to such Lender or the Administrative Agent, as the case may
be, in the specified currency, each Borrower agrees, to the
fullest extent that it may effectively do so, as a separate
obligation and notwithstanding any such judgment, to indemnify
such Lender or the Administrative Agent, as the case may be,
against such loss, and if the amount of the specified currency so
purchased exceeds (a) the sum originally due to any Lender or the
Administrative Agent, as the case may be, in the specified
currency and (b) any amounts shared with other Lenders as a
result of allocations of such excess as a disproportionate
payment to such Lender under Section 9.18, such Lender or the
Administrative Agent, as the case may be, agrees to remit such
excess to AMRESCO.
ARTICLE III
YIELD PROTECTION; TAXES
Section 3.1. INTENTIONALLY OMITTED.
Section 3.2. Changes in Capital Adequacy Regulations. If
a Lender determines the amount of capital required or expected to
be maintained by such Lender, any Lending Installation of such
Lender or any corporation controlling such Lender is increased as
a result of a Change, then, within ninety (90) days of written
demand by such Lender and delivery to AMRESCO of a certified
calculation of the amounts owed hereunder, the Borrowers shall
pay such Lender the amount necessary to compensate for any
shortfall in the rate of return on the portion of such increased
capital which such Lender determines is attributable to this
Agreement, its Loans or its commitment to make Advances (for any
purpose) hereunder (after taking into account such Lender's, such
Lender's Lending Installation's or such controlling corporation's
policies as to capital adequacy). "Change" means (i) any change
after the date of this Agreement in the Risk-Based Capital
Guidelines, (ii) a Borrower shall cease to be a "depository
institution incorporated in an OECD country" within the meaning
of the Risk-Based Capital Guidelines, or (iii) any adoption of or
change in any other law, governmental or quasi-governmental rule,
regulation, policy, guideline, interpretation, or directive
(whether or not having the force of law) after the date of this
Agreement which affects the amount of capital required or
expected to be maintained by any Lender or any Lending
Installation or any corporation controlling any Lender.
"Risk-Based Capital Guidelines" means (i) the risk-based capital
guidelines in effect in the United States on the date of this
Agreement, including transition rules, and (ii) the corresponding
capital regulations promulgated by regulatory authorities outside
the United States implementing the July 1988 report of the Basle
Committee on Banking Regulation and Supervisory Practices
Entitled "International Convergence of Capital Measurements and
Capital Standards," including transition rules, and any
amendments to such regulations adopted prior to the date of this
Agreement.
Section 3.3. INTENTIONALLY OMITTED.
Section 3.4. INTENTIONALLY OMITTED.
Section 3.5. Taxes. (i) All payments by the Borrowers to
or for the account of any Lender or the Administrative Agent
hereunder or under any Note shall be made free and clear of and
without deduction for any and all Taxes. If the Borrowers shall
be required by law to deduct any Taxes from or in respect of any
sum payable hereunder to any Lender or the Administrative Agent,
(a) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable
to additional sums payable under this Section 3.5) such Lender or
the Administrative Agent (as the case may be) receives an amount
equal to the sum it would have received had no such deductions
been made, (b) the Borrowers shall make such deductions, (c) the
Borrowers shall pay the full amount deducted to the relevant
authority in accordance with applicable law and (d) the Borrowers
shall furnish to the Administrative Agent the original copy of a
receipt evidencing payment thereof within 30 days after such
payment is made.
(ii) In addition, the Borrowers hereby agree to pay any
present or future stamp or documentary taxes and any other excise
or property taxes, charges or similar levies which arise from any
payment made hereunder or under any Note or from the execution or
delivery of, or otherwise with respect to, this Agreement, any
Note or any other Loan Document ("Other Taxes").
(iii) The Borrowers hereby agree to indemnify
the Administrative Agent and each Lender for the full amount of
Taxes and Other Taxes (including, without limitation, any Taxes
or Other Taxes imposed on amounts payable under this Section 3.5)
paid by the Administrative Agent or such Lender and any liability
(including penalties, interest and expenses) arising therefrom or
with respect thereto. Payments due under this indemnification
shall be made within 30 days of the date the Administrative Agent
or such Lender makes demand therefor pursuant to Section 3.6.
(iv) Each Lender that is not incorporated under the
laws of the United States of America or a state thereof (each a
"Non-U.S. Lender") agrees that it will, not less than ten
Business Days after the date of this Agreement, (a) if such Non-
U.S. Lender is a bank within the meaning of Section 881(c)(3)(A)
(i) deliver to each of AMRESCO and the Administrative Agent two
duly completed copies of United States Internal Revenue Service
Form 1001 or 4224, certifying in either case that such Lender is
entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income
taxes, and (ii) deliver to each of AMRESCO and the Administrative
Agent a United States Internal Revenue Service Form W-8 or W-9,
as the case may be, and certify that it is entitled to an
exemption from United States backup withholding tax; or (b) if
such Non-U.S. Lender is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code and intends to claim exemption
for U.S. Federal withholding tax under Section 871(h) or 881(c)
of the Code with respect to payments of "portfolio interest",
deliver to each of AMRESCO and the Administrative Agent a Form W-
8, or any subsequent versions thereof or successors thereto (and,
if such Non-U.S. Lender delivers a Form W-8, a certificate
representing that such Non-U.S. Lender is not a bank for purposes
of Section 881(c) of the Code, is not a 10-percent shareholder
(within the meaning of Section 871(h)(3)(B) of the Code of any of
the Borrowers and is not a controlled foreign corporation related
to any of the Borrowers (within the meaning of Section 864(d)(4)
of the Code)), properly completed and duly executed by such Non-
U.S. Lender claiming complete exemption from, or a reduced rate
of, U.S. Federal withholding tax on payments of interest by the
Borrowers under this Agreement and the other Loan Documents.
Each Non-U.S. Lender further undertakes to deliver to each of
AMRESCO and the Administrative Agent (x) renewals or additional
copies of such forms (or any successor forms) on or before the
date that such forms expires or becomes obsolete, and (y) after
the occurrence of any event requiring a change in the most recent
forms so delivered by it, such additional forms or amendments
thereto as may be reasonably requested by AMRESCO or the
Administrative Agent. All forms or amendments described in the
preceding sentence shall certify that such Lender is entitled to
receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, unless an
event (including without limitation any change in treaty, law or
regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Lender from duly
completing and delivering any such form or amendment with respect
to it and such Lender advises AMRESCO and the Administrative
Agent that it is not capable of receiving payments without any
deduction or withholding of United States federal income tax.
(v) For any period during which a Non-U.S. Lender has
failed to provide AMRESCO with an appropriate form pursuant to
clause (iv) above (unless such failure is due to a change in
treaty, law or regulation, or any change in the interpretation or
administration thereof by any governmental authority, occurring
subsequent to the date on which a form originally was required to
be provided), such Non-U.S. Lender shall not be entitled to
indemnification under this Section 3.5 with respect to Taxes
imposed by the United States; provided that, should a Non-U.S.
Lender which is otherwise exempt from or subject to a reduced
rate of withholding tax become subject to Taxes because of its
failure to deliver a form required under clause (iv) above,
AMRESCO shall take such steps as such Non-U.S. Lender shall
reasonably request to assist such Non-U.S. Lender to recover such
Taxes.
(vi) Any Lender that is entitled to an exemption from
or reduction of withholding tax with respect to payments under
this Agreement, any Note or any other Loan Document pursuant to
the law of any relevant jurisdiction or any treaty shall deliver
to AMRESCO (with a copy to the Administrative Agent), at the time
or times prescribed by applicable law, such properly completed
and executed documentation prescribed by applicable law as will
permit such payments to be made without withholding or at a
reduced rate.
(vii) If the U.S. Internal Revenue Service or any
other governmental authority of the United States or any other
country or any political subdivision thereof asserts a claim that
the Administrative Agent did not properly withhold tax from
amounts paid to or for the account of any Lender (because the
appropriate form was not delivered or properly completed, because
such Lender failed to notify the Administrative Agent of a change
in circumstances which rendered its exemption from withholding
ineffective, or for any other reason), such Lender shall
indemnify the Administrative Agent fully for all amounts paid,
directly or indirectly, by the Administrative Agent as tax,
withholding therefor, or otherwise, including penalties and
interest, and including taxes imposed by any jurisdiction on
amounts payable to the Administrative Agent under this
subsection, together with all costs and expenses related thereto
(including attorneys fees and time charges of attorneys for the
Administrative Agent, which attorneys may be employees of the
Administrative Agent). The obligations of the Lenders under this
Section 3.5(vii) shall survive the payment of the Obligations and
termination of this Agreement.
Section 3.6. Lender Statements; Survival of Indemnity.
Each Lender shall deliver a written statement of such Lender to
AMRESCO (with a copy to the Administrative Agent) as to the
amount due, if any, under Section 3.1, 3.2, 3.4 or 3.5. Such
written statement shall set forth in reasonable detail the
calculations upon which such Lender determined such amount and
shall be final, conclusive and binding on the Borrowers in the
absence of manifest error. Determination of amounts payable
under such Sections in connection with a Eurocurrency Portion
shall be calculated as though each Lender funded its Eurocurrency
Portion through the purchase of a deposit of the type currency
and maturity corresponding to the deposit used as a reference in
determining the Eurocurrency Rate applicable to such Loan,
whether in fact that is the case or not. Unless otherwise
provided herein, the amount specified in the written statement of
any Lender shall be payable on demand after receipt by AMRESCO of
such written statement. The obligations of the Borrowers under
Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of the
Obligations and termination of this Agreement.
Section 3.7. INTENTIONALLY OMITTED.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.1. Closing. The Lenders shall not be required
to close the transactions contemplated by this Agreement or, as
to the Revolving Lenders, make the initial Advance hereunder,
unless all of the conditions set forth in this Section 4.1 are
satisfied in the determination of Administrative Agent.
(a) Borrowers shall have furnished to Administrative Agent,
with sufficient copies as reasonably requested by Administrative
Agent:
(i) copies of the articles or certificate of
incorporation, or articles or certificate of limited partnership,
or articles of organization, or other organizational documents,
as applicable, of each Borrower, each Guarantor and each other
Subsidiary executing the Pledge Agreement, together with all
amendments thereto, and a certificate of existence and good
standing for each Borrower, each Guarantor and each other
Subsidiary executing the Pledge Agreement, each certified by the
appropriate governmental officer, in the jurisdiction of
organization and the jurisdiction of the location, or the chief
executive office if more than one location (and any other
jurisdiction where the failure of any Borrower or Guarantor to be
qualified as a foreign corporation or partnership would have a
material adverse effect on the financial condition or operations
of such Borrower or Guarantor), of the applicable Borrower or
Guarantor; and copies, certified by the Secretary or Assistant
Secretary of each Borrower and each Guarantor (or the general
partner of each Borrower or Guarantor which is a partnership), of
the by-laws, partnership agreement or operating agreement, as
applicable, of each Borrower and Guarantor; provided, however,
that Borrowers shall have until February 14, 2000 to deliver all
such items, except for the items for or related to AMRESCO or any
other Borrower or Guarantor for which Administrative Agent
requires compliance with this Section 4.1(a) (i) prior to
February 14, 2000;
(ii) copies of resolutions of the Board of Directors or
resolutions or actions of any other appropriate governing body of
each Borrower and each Guarantor authorizing the lending and
security transactions contemplated hereunder and the execution of
all the Loan Documents to which each such Borrower or Guarantor
is a party, which resolutions shall be certified to by the
Secretary, Assistant Secretary, or an Authorized Officer of the
applicable Borrower or Guarantor;
(iii) an incumbency certificate, executed by the
Secretary or Assistant Secretary of each Borrower and each
Guarantor (or the general partner of each Borrower or Guarantor
which is a partnership), which shall identify by name and title
and bear the signatures of the Authorized Officers and any other
officers of such Borrower and such Guarantor authorized to sign
the Loan Documents to which such Borrower or Guarantor is a party
(including the Power of Attorney referenced in clause (iv) below
if applicable), upon which certificate the Administrative Agent
and the Lenders shall be entitled to rely until informed of any
change in writing by AMRESCO;
(iv) an original Power of Attorney for each Borrower
(other than AMRESCO), each Guarantor (other than Foreign
Subsidiaries), and each other Subsidiary (other than Foreign
Subsidiaries) of AMRESCO that is to execute the Pledge Agreement
or any amendment thereto or any other Loan Document, irrevocably
appointing AMRESCO as its agent and attorney-in-fact to act for
and on its behalf for all matters related to this Agreement, the
other Loan Documents and the Credit Facilities, including without
limitation execution of all Loan Documents (expressly including
all Notes and all Borrowing Notices), receipt of all notices
hereunder, and the taking of actions by the Borrowers or
Guarantors hereunder or related to the Credit Facilities, such
Powers of Attorney to be in form and content acceptable to
Administrative Agent;
(v) a certificate, signed by an Authorized Officer of
AMRESCO, stating that on the date of this Agreement no Default or
Event of Default has occurred and is continuing;
(vi) a written opinion of legal counsel for the
Borrowers and the Guarantors, addressed to Administrative Agent
and the Lenders, covering such matters as requested by
Administrative Agent and its counsel, in form and substance
acceptable to Administrative Agent and its counsel;
(vii) the Notes required by Section 2.15, payable
to the order of each Lender, as applicable;
(viii) information satisfactory to the
Administrative Agent and the Required Lenders regarding the
Borrowers' Year 2000 Program;
(ix) the Security Documents, and all amendments and
supplements thereto as reasonably required by Administrative
Agent and its counsel in connection with this Agreement, fully
executed by all parties thereto;
(x) all financing statements related to the Security
Documents requested by Administrative Agent, executed by the
appropriate Borrower or Guarantor;
(xi) copies of all Custodial Agreements covering all
Assigned Loans in effect on the date of this Agreement, in form
and content acceptable to Administrative Agent, as listed in
Schedule 15;
(xii) the summary of insurance policies described
in Section 6.21;
(xiii) the fully executed Lend Lease Agreement
certified by an Authorized Officer of AMRESCO as being a true and
correct copy thereof as in effect on the date of closing this
Agreement, which certification shall also contain the
representations set forth in Section 6.23 with respect to the
Lend Lease Agreement;
(xiv) evidence that the Warehouse Lines financing
provided by Prudential Securities Credit Corp. to AMRESCO
Commercial Finance, Inc. for its franchise lending and small
business lending operations have been renewed and extended on
terms satisfactory to Administrative Agent, in its reasonable
discretion;
(xv) the originals of all Foreign Subsidiary Inter-
Company Notes, and all other Inter-Company Notes requested by
Administrative Agent, the MIC Notes, and all other notes payable
to any Borrower or any Guarantor (other than notes evidencing
Assigned Loans held by a Custodian), duly endorsed in blank;
(xvi) copies of any material agreements to which
AMRESCO or any other Borrower or any Guarantor is a party as
requested by Administrative Agent, including specifically without
limitation, the agreement(s) evidencing the CLC Transaction, any
agreements related to MIC, and any agreements evidencing or
related to AMRESCO's investment in and arrangements with Finamco,
LLC; and
(xvii) such other documents, instruments and
certificates, as Administrative Agent or its counsel may have
reasonably requested.
(b) The representations and warranties contained in this
Agreement and in the other Loan Documents shall be true and
correct upon the execution by Borrowers and Guarantors hereof and
the closing of the transactions contemplated under this
Agreement.
(c) On or prior to the date of closing the transactions
contemplated hereunder, Borrowers shall have paid all fees and
expenses owing by Borrowers to Administrative Agent and/or the
Lenders, including without limitation the amendment fees to the
Lenders, and, in the amounts requested on or before such date,
the expenses and reasonable attorneys' fees of counsel to
Administrative Agent, and reasonable consultant fees and
expenses.
Section 4.2. Conditions To All Advances. The obligation
of the Lenders to fund any Advance as provided herein is subject
to the satisfaction of the following conditions and requirements:
(a) timely receipt by Administrative Agent of a
Borrowing Notice (which shall be appropriately modified to
Administrative Agent's satisfaction with respect to the initial
funding of the Term Loan Facilities);
(b) immediately before and after giving effect to such
Advance, no Default or Event of Default shall have occurred and
be continuing, and the making of such Advance shall not cause a
Default or an Event of Default;
(c) each of the representations and warranties
contained in this Agreement and in the other Loan Documents
shall be true and correct in all material respects on and as of
the date of such Advance, except that any representation or
warranty that speaks as of a particular date shall only be
required on the date of each such Advance to be true and correct
in all material respects as of the date to which such
representation or warranty speaks and not as of any subsequent
date;
(d) all legal matters incident to the making of the
Advance shall be satisfactory to Administrative Agent and its
counsel; and
(e) receipt by Administrative Agent of such
information and documentation as Administrative Agent shall
reasonably deem necessary, advisable or desirable in connection
with the funding of such Advance.
Section 4.3. Conditions to Letters of Credit . The
obligation of the Issuing Lender to issue any Facility Letter of
Credit as provided herein is subject to the satisfaction by
Borrowers of the following conditions and requirements:
(a) timely receipt by the Issuing Lender of a
Borrowing Notice and a fully completed LOC Application;
(b) timely receipt by Administrative Agent of a
Borrowing Notice;
(c) immediately before and after the issuance of such
Facility Letter of Credit, no Default or Event of Default shall
have occurred and be continuing and the issuance of any Facility
Letter of Credit shall not cause a Default or Event of Default;
(d) each of the representations and warranties
contained in this Agreement and in the other Loan Documents
shall be true in all material respects on and as of the date of
issuance of such Facility Letter of Credit, except that any
representation or warranty that speaks as of a particular date
shall only be required on the date of issuance of each such
Facility Letter of Credit to be true and correct in all material
respects as of the date to which such representation or warranty
speaks and not as of any subsequent date;
(e) all legal matters incident to the issuance of such
Facility Letter of Credit shall be satisfactory to Administrative
Agent and Issuing Lender and their counsel;
(f) timely receipt by Administrative Agent (on behalf
of the Issuing Lender) of the issuance fee required to be paid to
the Issuing Lender related to the issuance of such Facility
Letter of Credit; and
(g) receipt by Administrative Agent of such
information and documentation as Administrative Agent or the
Issuing Lender shall reasonably deem necessary, advisable or
desirable in connection with the issuance of such Facility Letter
of Credit.
Each Borrowing Notice with respect to each Advance or
Facility Letter of Credit shall constitute a representation and
warranty by the Borrowers that the conditions contained in
Sections 4.2 and 4.3, as applicable, have been satisfied.
Administrative Agent may require a duly completed compliance
certificate in substantially the form of Exhibit B as a condition
to making an Advance or causing the issuance of a Facility Letter
of Credit.
ARTICLE V
COLLATERAL
Section 5.1. Security and Guaranties.
Section 5.1.1. The Loans, the Facility Letters of
Credit, and all of the other Obligations (as the same may be
modified, amended, extended, supplemented and/or increased
pursuant to this Agreement) shall all be (a) secured by the
Collateral and all proceeds thereof pursuant to the Liens created
by the Security Documents, until the particular item of
Collateral is released or until all of the Facility Letters of
Credit issued hereunder have expired, all Facility Foreign
Currency Exchange Agreements have terminated, and all of the
Loans and all other Obligations are indefeasibly paid and
performed in full (and any obligation of the Revolving Lenders to
make Advances has been terminated) and (b) guaranteed by each
Subsidiary that is not a Borrower (other than the Excluded
Subsidiaries and, subject to Section 5.1.4, Foreign Subsidiaries
in which AMRESCO has no direct stock or other equity ownership
interest, except AMRESCO Funding Canada Inc.) pursuant to the
terms of the Guaranty.
Section 5.1.2. All Foreign Subsidiary Inter-Company
Notes, together with the respective blank endorsement, shall be
delivered to Administrative Agent as Collateral. On or before
thirty (30) days after any Borrower or any Guarantor makes an
Investment in any Foreign Subsidiary, such applicable Borrower or
such applicable Guarantor shall deliver to Administrative Agent
the related original Foreign Subsidiary Inter-Company Note,
together with a collateral assignment and blank endorsement
thereof in form satisfactory to Administrative Agent. All Inter-
Company Notes now or hereafter executed shall be delivered to
Administrative Agent (together with the respective blank
endorsement) as Collateral. Within fifteen (15) days of the
request of Administrative Agent made at any time and from time to
time, AMRESCO shall deliver to Administrative Agent an Inter-
Company Note evidencing the investment of any Borrower or any
Guarantor in a Subsidiary of such Borrower or Guarantor, together
with an endorsement thereof in blank.
Section 5.1.3. Upon the earlier to occur of (1) thirty
(30) days after the filing of articles of incorporation,
certificates of limited partnership or similar organizational
documents with the appropriate Governmental Authority of any
future Subsidiary of a Borrower or (2) two (2) Business Days
prior to the date that such Subsidiary obtains from a Borrower
proceeds of an Advance under the Revolving Credit Facility or any
of its assets is included in the Borrowing Base, Borrowers shall
cause to be delivered to Administrative Agent (a) a Supplement to
Loan Documents properly executed by such future Subsidiary to add
such Subsidiary as a Borrower hereunder (or at Administrative
Agent's election, a Guarantor hereunder), such that the
Subsidiary becomes party on the Notes or the Guaranty Agreement
and related contribution and indemnification agreement, as
applicable, the Security Agreement, the Pledge Agreement, the
Collateral Assignment and any and all other Loan Documents, as
applicable, (b) all financing statements related thereto deemed
necessary or advisable by Administrative Agent, properly executed
by such Subsidiary, and any appropriate Borrower(s) and/or
Guarantor(s), (c) if applicable, the original stock certificates
for all of the outstanding shares of the stock in such Subsidiary
owned by any Borrower or Guarantor or any other Subsidiary
(except an Excluded Subsidiary), accompanied by appropriate
undated stock powers executed in blank by the applicable
Borrower, Guarantor or Subsidiary, and (d) all resolutions,
certificates or documents Administrative Agent may reasonably
request relating to the formation, existence and good standing of
such Subsidiary, corporate authority for the execution and
validity of the Loan Documents described in clauses (a), (b) and
(c) above and any other documents and matters relevant to the
formation of such future Subsidiary and its status as a Borrower
or Guarantor (and pledgor if applicable), all in form and
substance satisfactory to Administrative Agent, which
resolutions, certificates and documents shall include, without
limitation, (i) the articles of incorporation and bylaws or other
organizational documents of such Subsidiary, (ii) resolutions of
the board of directors or other appropriate consents authorizing
the execution of the Loan Documents described in clauses (a), (b)
and (c) above on behalf of such Subsidiary and the granting of
all relevant Liens as security for the Credit Facilities,
(iii) certificates of incumbency for the officers of such
Subsidiary, and (iv) certificates of corporate (or other legal
entity) existence and good standing issued by the state of
organization of such future Subsidiary and from the appropriate
Governmental Authority of each state in which such future
Subsidiary is required by applicable law to be qualified.
Section 5.1.4. Upon the request of Administrative Agent
at any time, Borrowers shall cause any one or more of the Foreign
Subsidiaries, as designated by Administrative Agent, to (a)
become a Borrower or, with respect to any Foreign Subsidiary that
is not a Guarantor as of the date hereof, to execute a Guaranty
(or supplement to a Guaranty) and/or a Pledge Agreement (or
supplement to a Pledge Agreement) and take all other actions to
become a Guarantor as provided in Section 5.1.3, and (b) with
respect to any Foreign Subsidiary, to grant to Administrative
Agent (on behalf of the Lenders) Liens on any or all of the
assets of such designated Foreign Subsidiaries, except to the
extent any such Foreign Subsidiary is prohibited from so doing
pursuant to an agreement permitted by Section 7.15(b), and to
execute, deliver to Administrative Agent and file all documents,
instruments and agreements (all at Borrowers' expense) which
Administrative Agent shall require to create and perfect such
Liens; provided, however, that Administrative Agent shall not
make any such request with respect to an Excluded Foreign
Subsidiary unless and until the assets of such Excluded Foreign
Subsidiary are no longer subject to the Lend Lease Agreement or
the Lend Lease Agreement is terminated or the Lend Lease Closing
Date does not occur prior to March 1, 2000; and provided further
that in no event shall AMRESCO Japan, Inc. (or any other Foreign
Subsidiary that is not legally permitted to do so) be required to
become a Borrower or a Guarantor.
Section 5.1.5. Administrative Agent and Lenders agree
that SBA Guaranteed Loans and the related SBA Lender Agreement
Assets are and shall be deemed excluded as Collateral under the
Loan Documents and shall not be covered by or subject to the
Security Agreement or the Collateral Assignment or the financing
statements executed by AMRESCO Independence Funding, Inc. or any
such other Subsidiary that originates or holds SBA Guaranteed
Loans that has been approved by Administrative Agent.
Section 5.2. Requirements For Assigned Loans. With
respect to each of the Assigned Loans, the applicable Borrower or
Guarantor shall deliver to the applicable Custodian the documents
required by the applicable Custodial Agreement, which shall
include, without limitation, the following:
(a) Either (i) the original promissory note or notes
evidencing such Assigned Loan properly endorsed showing
endorsements thereof from the original holder thereof and all
subsequent holders, to the applicable Borrower or Guarantor,
together with an endorsement thereof in blank executed by such
Borrower or Guarantor (in form satisfactory to Administrative
Agent), which endorsement may be in the form of one or more
allonge endorsements affixed to the respective promissory note,
(ii) with respect to any Assigned Loan where the original
promissory note has been lost, an original lost note affidavit in
form which is sufficient under the UCC or the laws of any
applicable jurisdiction to enable the owner thereof to maintain
an action on the related promissory notes and recover from any
party liable thereon, and properly executed by the Person that
sold such promissory note to the applicable Borrower or
Guarantor, (iii) with respect to any Assigned Loan for which any
Borrower or Guarantor has a participation interest, the original
or a copy of the participation certificate or agreement
evidencing the applicable Borrower's or Guarantor's interest in
such Assigned Loan, or (iv) with respect to any Assigned Loan for
which any Borrower or Guarantor has a judgment, an original
Assignment of Judgment (as defined in the Collateral Assignment);
(b) Copies of the mortgage, deed of trust or other
security documents by which a lien or security interest has been
granted to secure such Assigned Loan;
(c) An original Transfer of Liens, which is sufficient
under the laws of the applicable jurisdiction for recording in
such jurisdiction and to effect a transfer of the Liens therein
described, properly executed and acknowledged by the appropriate
Borrower or Guarantor;
(d) To the extent in the possession of any Borrower or
Guarantor or an Affiliate of any Borrower or Guarantor, a Title
Policy and certificate of hazard and/or liability insurance with
respect to any Underlying Real Estate; provided that a Title
Policy shall be furnished for the Underlying Real Estate for any
Assigned Loan owned by AMRESCO Funding Canada Inc. for any such
Assigned Loan to be included in the Borrowing Base; and
(e) Such other information related to the Underlying
Real Estate, to the extent in the possession of any Borrower,
Guarantor or Affiliate of any Borrower or Guarantor, as
Administrative Agent shall reasonably request.
Section 5.3. Requirements for Mortgaged Properties. With
respect to each of the Mortgaged Properties, the applicable
Borrower or Guarantor which owns such Mortgaged Property shall
deliver to the applicable Custodian the documents required by the
applicable Custodial Agreement with respect thereto which shall
include, without limitation, the following:
(a) A copy of the deed or conveyance instrument by
which the applicable Borrower or Guarantor took title to the
Mortgaged Property;
(b) A Title Policy (which Title Policy may be a
mortgagee policy of title insurance which has converted to an
owner's policy of title insurance after foreclosure), for each
Mortgaged Property with a value in excess of One Hundred Thousand
and No/100 Dollars ($100,000.00) and, unless covered under an
umbrella policy approved by Administrative Agent, a certificate
of hazard and/or liability insurance covering the Mortgaged
Property;
(c) An original, properly executed and acknowledged
Mortgage, together with such financing statements related thereto
as are necessary or advisable, in Administrative Agent's
determination, to perfect the Lenders' Liens with respect to the
fixtures and personal property subject to such mortgage; and
(d) Such other information as Administrative Agent
shall reasonably request.
Section 5.4. Recording. Any original Mortgage (and
related financing statement) and Transfer of Lien held by any
Custodian shall be recorded in the appropriate real estate (or
UCC, as appropriate) records if and when (i) a Default or an
Event of Default occurs, or (ii) Administrative Agent delivers
ten (10) days prior written notice to the applicable Custodian
and AMRESCO that the Required Lenders require the recordation of
such Mortgages (and related financing statements) and/or
Transfers of Liens. After the occurrence of any of the above
events, the applicable Custodian or Administrative Agent shall
have the right to record any and all Mortgages (and related
financing statements) and Transfers of Liens then held by the
Custodian, and Borrowers shall be required to pay, or reimburse
the Lenders for the payment of, all filing fees, mortgage and
stamp taxes and other expenses incurred by Lenders,
Administrative Agent or Custodian in connection with the
recordation of the Mortgages (and related financing statements)
and Transfers of Liens. Notwithstanding the foregoing or
anything else herein or in the Existing Credit Agreement to the
contrary, on or before February 14, 2000, Mortgages and related
UCC financing statements for each of the Mortgaged Properties so
designated for recordation on Schedule 16 shall be recorded in
all appropriate filing offices, and Borrowers shall execute and
deliver all such documents and take all other actions necessary
for such recordation in compliance with all applicable laws.
Section 5.5. Administrative Agent's Discretion. All
requirements for the Collateral are imposed solely and
exclusively for the benefit of the Lenders but are to be enforced
and monitored solely and exclusively by Administrative Agent in
accordance with the provisions of the Loan Documents. No Person
(including any Borrower, any Guarantor or any Lender) other than
Administrative Agent shall have any standing to require
satisfaction of any such requirements. Administrative Agent
shall be entitled to require delivery of the items referenced in
Section 5.2 and Section 5.3 at any time and from time to time,
and the failure of Administrative Agent to request any such items
at any particular time shall not constitute a waiver of the
Lenders' rights to thereafter require that such items be
delivered.
Section 5.6. Lockbox; Lockbox Accounts; Other Accounts.
(a) Notwithstanding any provision herein or in the
other Loan Documents to the contrary, Borrowers and Guarantors
agree that they have previously instructed all current Account
Debtors, and they will cause instructions to be given to all
future Account Debtors within thirty (30) days after the
acquisition of an Assigned Loan that will be included in
computing the Borrowing Base, pursuant to a letter from the
appropriate Borrower or Guarantor, or the seller of such Managed
Asset Portfolio or the Custodian in form approved by
Administrative Agent, to mail all payments and other remittances
owing with respect to the Assigned Loans directly to the Lockbox.
Lockbox Agent will have exclusive and unrestricted access to the
Lockbox and will have complete and exclusive authority to
receive, pick up and open all mail addressed to the Lockbox,
whether registered, certified, insured or otherwise. Neither any
Borrower nor any Guarantor will have access to or control over
the Lockbox or any checks or monies received in the Lockbox. All
items received and monies collected in connection with the
Assigned Loans will be processed by the Lockbox Agent pursuant to
the terms of the Lockbox Agreement, and in the event any checks
or monies shall be submitted to any Borrower or any Guarantor by
any Account Debtor under the Assigned Loans, or shall otherwise
come into the possession of any Borrower or any Guarantor, the
same shall be deemed held by such Borrower or Guarantor in trust
for the Lenders, and such Borrower or Guarantor shall deliver
the same to the Lockbox Agent within three (3) Business Days
after received by such Borrower or Guarantor, endorsed if
appropriate, for deposit into one of the Lockbox Accounts.
(b) As provided in the Lockbox Agreement, the balance
of funds in the Lockbox Accounts shall be transferred daily to
the Capture Account (as such term is defined and more
particularly described in the Lockbox Agreement). So long as no
Default or Event of Default has occurred and is continuing,
amounts in the Capture Account will be deposited into AMRESCO's
operating account at Bank of America as designated in writing
from time to time by AMRESCO to the Lockbox Agent (provided that
at the direction of Administrative Agent, in its sole discretion,
the Lockbox Agent shall disburse funds from the Capture Account
to Administrative Agent for application to pay any amounts then
due on any of the Credit Facilities). Upon the occurrence and
during the continuance of a Default or Event of Default, all
amounts in the Capture Account shall be disbursed to and applied
by Lockbox Agent and Administrative Agent to reduce the
outstanding Obligations as provided herein and to be paid in
accordance with Section 9.19. Neither any Borrower nor any
Guarantor nor any other Person (other than Administrative Agent)
shall have any access to or control over any Lockbox Account or
the Capture Account, or any of the funds therein, and
Administrative Agent shall have sole dominion and control over
such accounts, subject to the terms of this Agreement and the
Lockbox Agreement.
(c) With respect to all of the Lockbox Accounts, the
Capture Account, the Lend Lease Post-Closing Adjustment Account,
any Letter of Credit escrow account and any other deposit account
whatsoever pledged or intended to be pledged as security for the
Obligations, each Borrower, and each Guarantor, hereby pledges,
assigns, sets over and transfers to Administrative Agent, as
agent for the benefit and on behalf of the Lenders, all such
accounts and the funds therein and the rights of each Borrower
and each Guarantor to such accounts and the funds therein, and
grants a security interest in and to such accounts and the rights
of each Borrower and each Guarantor to such accounts and the
funds therein in favor of Administrative Agent, as agent for the
benefit and on behalf of Lenders. Such pledge, assignment and
security interest herein granted shall secure the payment and
performance of the Loans and all the Obligations, and
Administrative Agent, as agent for the benefit and on behalf of
Lenders, shall be entitled to exercise all rights and remedies
available hereunder and under all the Loan Documents, the UCC,
other applicable laws and equitable rights, including, without
limitation, rights of setoff, with respect thereto. The right of
setoff is hereby expressly granted with respect to and shall
apply to amounts on deposit in any such accounts with
Administrative Agent as if such deposits were held by each
Lender. Possession of any such accounts and the funds therein by
Administrative Agent (or any successor depositary institution),
as agent and bailee for all the Lenders, shall be deemed
possession by each Lender. Each Borrower, and each Guarantor,
hereby authorizes Administrative Agent (a) to withdraw, collect
and receipt for any and all funds on deposit in or payable on any
such accounts; (b) on behalf of the applicable Borrower or
Guarantor, to endorse the name of such Borrower or Guarantor upon
any checks, drafts or other instruments payable to such Borrower
or Guarantor evidencing payment to such account; and (c) to
surrender or present for notation of withdrawal the passbook
certificate or other instruments or documents issued in
connection with such account, all such documents and instruments
to be issued to and retained in the possession of Administrative
Agent. In the event of any setoff of the funds in any such
account or application of such funds pursuant to the assignment
and security interest herein granted, Administrative Agent shall
distribute to each Lender its ratable portion of such funds in
accordance with the applicable terms of this Agreement. AMRESCO
and any applicable Borrowers or Guarantors shall execute any and
all documents reasonably requested by Administrative Agent
relating to such accounts, including without limitation any
Account Assignments and financing statements. Borrowers and
Guarantors expressly understand and agree that Administrative
Agent and the Lenders will have the right of setoff with respect
to any such accounts upon the occurrence of an Event of Default.
No such account shall be deemed to be a special account for
purposes of limiting setoff rights with respect thereto, and no
third party shall be a beneficiary of any such accounts, or of
the terms of the agreements regarding such accounts between
Administrative Agent, for the Lenders, and any Borrowers or
Guarantors. Without limitation of the foregoing, it is expressly
understood and agreed that the establishment of the Lend Lease
Post-Closing Adjustment Account is solely as an accommodation to
those Borrowers who are sellers under the Lend Lease Agreement to
facilitate satisfaction of their obligations under Section 3.3
thereof, and that such account and the funds therein are
Collateral which are subject in all respects to the rights
(including setoff) of Administrative Agent and the Lenders, and
that no third party (including Lend Lease) shall be a beneficiary
of such account or the provisions of this Agreement respecting
such account.
Section 5.7. Releases of Collateral.
Section 5.7.1 Continuing Operations. Prior to the
occurrence of a Default or Event of Default, Borrowers and
Guarantors shall be entitled to obtain a release of the Lenders'
Liens with respect to Collateral designated by Borrowers and
which is owned by the Subsidiaries conducting the Continuing
Operations so long as (a) either (i) the Collateral being
released is being sold by the applicable Subsidiary in the
ordinary course of business, or (ii) the Collateral being
released is being pledged by the applicable Subsidiary to secure
Warehouse Lines as permitted under Section 7.11, (b) Borrowers
and Guarantors shall continue to be in compliance under this
Agreement following the release of such Lenders' Liens,
including, without limitation, in compliance with the applicable
required Borrowing Base Coverage Ratio, and (c) Borrowers have
reduced or will reduce on a date approved by Administrative Agent
the amount outstanding under the Revolving Credit Facility in an
amount deemed satisfactory by Administrative Agent, in its sole
discretion, due to such release of Collateral. In the case of a
requested release for a sale or transfer of any such assets that
does not meet the requirements of the foregoing clause (a) but
does meet the requirements of the foregoing clauses (b) and (c),
such release shall be subject to the consent of Administrative
Agent, in its sole and absolute discretion. Except as covered by
the Specified Asset Release Agreement as provided in Section
5.7.6, or with respect to the release of all or substantially all
of the Collateral as referenced in Section 11.3(a)(vii) as
requiring the consent of all Lenders, any other release of such
Collateral shall be granted by Administrative Agent only with the
consent of the Required Lenders.
Section 5.7.2. Discontinued Operations. Prior to the
occurrence of a Default or Event of Default, Borrowers and
Guarantors shall be entitled to obtain a release of the Lenders'
Liens with respect to Collateral designated by Borrowers and
which is owned by the Subsidiaries in which the Discontinued
Operations are or were conducted (including without limitation
stock and/or other ownership interests in the Discontinued
Subsidiaries), so long as (a) Administrative Agent, in its sole
and absolute discretion, has approved the release price for the
sale of such assets, and (b) the proceeds of such sale (net only
of reasonable and customary closing costs) are paid to
Administrative Agent, for the benefit of the Term Lenders as
required by Section 2.2.2.
Section 5.7.3. Subsidiary Stock and Notes. In no event
shall Borrowers or Guarantors be entitled to a release of the
Lenders' Liens with respect to (a) the stock and other ownership
interests of AMRESCO's direct and indirect Subsidiaries required
to be pledged hereunder, except in connection with a merger,
consolidation, or dissolution permitted by Section 7.12 or as
specifically provided in Sections 5.7.2 and 5.7.6, and in Section
5.7.5 to the extent the Lend Lease Agreement provides for the
transfer of any stock or other ownership interests, and (b) the
Foreign Subsidiary Inter-Company Notes, unless such notes are
paid in full.
Section 5.7.4. Structured Real Estate Portfolio.
Notwithstanding anything in this Section 5.7, or any other
provision hereof or of the other Loan Documents, Borrowers shall
be entitled to the release of the Lenders' Liens with respect to
the Assigned Loans in the Structured Real Estate Portfolio so
long as (a) the SREP Required Payment, and the Lend Lease
Deferral if applicable, is paid to Administrative Agent, for the
benefit of the Lenders, as provided in Sections 2.2.1(c) and
2.2.3(a), and (b) the gross cash proceeds of the Structured Real
Estate Portfolio Sale (or the subject Structured Real Estate
Asset Sale) received by Borrowers is not less than the greater of
(i) 95% of the book value of the Structured Real Estate Portfolio
(or the subject Assigned Loan in the Structured Real Estate
Portfolio), and (ii) an amount determined by Administrative Agent
to be 95% of the market value of the Structured Real Estate
Portfolio (or the subject Assigned Loan in the Structured Real
Estate Portfolio), and (c) no Default or Event of Default has
occurred and is continuing.
Section 5.7.5. Lend Lease Assets. Notwithstanding
anything in this Section 5.7, or any other provision hereof or of
the other Loan Documents, Borrowers shall be entitled to a
release of the Lenders' Liens with respect to the assets being
sold to Lend Lease as set forth in the Lend Lease Agreement upon
closing of the transactions contemplated under the Lend Lease
Agreement on the terms thereof, and receipt by Administrative
Agent, for the benefit of the Lenders, of the Lend Lease Required
Payment as provided in Section 2.2.1(a), so long as no Default or
Event of Default has occurred and is continuing at such time; and
provided that (a) the original of the Lend Lease Holdback Note
has been delivered to Administrative Agent, together with an
allonge endorsement in blank in form acceptable to Administrative
Agent, (b) the Lend Lease Post-Closing Adjustment Account has
been established and funded, and has been duly assigned to
Administrative Agent for the benefit of the Lenders, and (c) the
Servicing Agreement has been duly executed and is in effect, and
it has been duly assigned to Administrative Agent for the benefit
of the Lenders as provided in Section 7.20; provided further,
however, that the requirements of the foregoing clauses (a), (b)
and (c) may be satisfied by delivery in escrow for Administrative
Agent, on terms reasonably acceptable to Administrative Agent,
such funds, documents and other items (including without
limitation the original Lend Lease Holdback Note and endorsement,
the funds to be deposited in the Lend Lease Post-Closing
Adjustment Account, and the Servicing Agreement), pending
consummation of the closing of the Lend Lease Agreement and the
release of the Lenders' Liens contemplated in this Section 5.7.5.
Section 5.7.6. Other Asset Sales. Borrowers shall be
entitled to the release of the Lenders' Liens with respect to
(a) the assets of, or the stock of, the Subsidiaries whose
business is the lines of business comprising AMRESCO's "Consumer
Finance" operations, "Builders Group" division and operations,
and "Telecapital" division and operations, (b) AMRESCO's Foreign
Subsidiaries organized and operating in the United Kingdom and
Jersey, Channel Islands (and/or their assets), and (c) the stock
and stock options in AMRESCO Capital Trust owned by AMRESCO,
AMREIT Holdings, Inc., and AMREIT Managers, L.P., and the rights
and interests of AMREIT Managers, L.P. under its management
agreement with AMRESCO Capital Trust, and related interests, all
subject to and in accordance with the terms, conditions and
provisions of a separate written agreement (the "Specified Asset
Release Agreement") regarding such releases executed by and
between AMRESCO and Administrative Agent as of the date hereof,
so long as no Default or Event of Default has occurred and is
continuing.
Section 5.8. Deposit of Cash Collateral for Facility
Letters of Credit. Upon the occurrence of a Default or an Event
of Default, Borrowers shall, on the next succeeding Business Day,
deposit in a segregated, interest bearing account with
Administrative Agent such funds as Administrative Agent may
request, up to a maximum amount equal to the aggregate existing
Facility Letter of Credit Exposure, any such deposit to occur
automatically (and may be made by a transfer of funds from
pledged accounts with Administrative Agent) upon the occurrence
of an Event of Default described in Sections 8.1.6 or 8.1.7. Any
funds so deposited shall be held by Administrative Agent as
security for the Obligations (including in respect of the
Facility Letters of Credit) and Borrowers will, in connection
therewith, execute and deliver such assignments and security
agreements in form and substance satisfactory to Administrative
Agent which Administrative Agent may, in its discretion, require.
As drafts or demands for payment are presented under any Facility
Letter of Credit, Borrowers hereby irrevocably direct
Administrative Agent to apply such funds to satisfy such drafts
or demands. When all Facility Letters of Credit have expired and
the Revolving Notes have been repaid in full (and Revolving
Lenders have no obligation to make further Advances or issue
Facility Letters of Credit hereunder) or such Default or Event of
Default has been cured to the satisfaction of Administrative
Agent, Administrative Agent shall release to Borrowers any
remaining funds deposited under this Section 5.8. Whenever
Borrowers are required to make deposits under this Section 5.8
and fail to do so on the day such deposit is due, Administrative
Agent may (but shall not be obligated to do so) make such deposit
from an Advance under the Revolving Credit Facility (provided
that any such Advance, together with all other outstanding
Advances [including Swingline Advances], the Facility FX Exposure
and the Facility Letter of Credit Exposure [less the amount of
such Advance] shall not exceed the Revolving Commitment), or
using any funds of Borrowers (including without limitation in
pledged accounts) then available to the Revolving Lenders.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Each of the Borrowers and Guarantors represents and warrants
to Administrative Agent and the Lenders that:
Section 6.1. Existence and Standing. Each of the
Borrowers, Guarantors, and Subsidiaries is a corporation, limited
partnership or limited liability company (as designated
respectively in Borrowers' Corporate Organizational Chart) duly
and properly incorporated or organized, as the case may be,
validly existing and (to the extent such concept applies to such
entity) in good standing under the laws of its jurisdiction of
incorporation or organization and has all requisite authority to
own and lease its Property and to conduct its business in each
jurisdiction in which its Property is located or its business is
conducted.
Section 6.2. Authorization and Validity. Each of the
Borrowers, Guarantors and Subsidiaries has the power and
authority and legal right to execute and deliver the Loan
Documents to which it is a party, to consummate the transactions
contemplated therein, and to perform its obligations thereunder.
The execution and delivery by each of the Borrowers, Guarantors,
and other applicable Subsidiaries of the Loan Documents to which
it is a party and the performance of its obligations thereunder
have been duly authorized by proper corporate proceedings, and
the Loan Documents to which each Borrower, each Guarantor, or
each other applicable Subsidiary is a party constitute the legal,
valid and binding obligations of such Borrower, Guarantor or
other applicable Subsidiary enforceable against such Borrower,
Guarantor or other applicable Subsidiary in accordance with their
terms, except as enforceability may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of
creditors' rights generally.
Section 6.3. No Conflict; Government Consent. Neither
the execution and delivery by any Borrower, any Guarantor or any
other Subsidiary of the Loan Documents to which it is a party,
nor the consummation of the transactions therein contemplated,
nor compliance with the provisions thereof will violate (i) any
law, rule, regulation, order, writ, judgment, injunction, decree
or award binding on any Borrower, any Guarantor or any Subsidiary
or (ii) any Borrower's, any Guarantor's or any Subsidiary's
articles or certificate of incorporation, partnership agreement,
certificate of partnership, articles or certificate of
organization, by-laws, or operating or other management
agreement, as the case may be, or (iii) the provisions of any
indenture, instrument or agreement to which any Borrower, any
Guarantor or any Subsidiary is a party or is subject, or by which
it, or its Properties, is bound, or conflict with or constitute a
default thereunder, or result in, or require, the creation or
imposition of any Lien in, of or on the Properties of any
Borrower, any Guarantor or any Subsidiary pursuant to the terms
of any such indenture, instrument or agreement. No order,
consent, adjudication, approval, license, authorization, or
validation of, or filing, recording or registration with, or
exemption by, or other action in respect of any governmental or
public body or authority, or any subdivision thereof, which has
not been obtained by AMRESCO or any of its Subsidiaries, is
required to be obtained by any Borrower, any Guarantor or any
Subsidiary in connection with the execution and delivery of the
Loan Documents, the borrowings and other extensions of credit
under this Agreement, the payment and performance by the
Borrowers and Guarantors of the Obligations or the legality,
validity, binding effect or enforceability of any of the Loan
Documents.
Section 6.4. Financial Statements. The September 30,
1999 consolidated financial statements of AMRESCO and its
Subsidiaries heretofore delivered to the Lenders were prepared in
accordance with Agreement Accounting Principles in effect on the
date such statements were prepared and fairly present the
consolidated financial condition and operations of AMRESCO and
its Subsidiaries at such date and the consolidated results of
their operations for the period then ended.
Section 6.5. Material Adverse Change. Except as disclosed
to Administrative Agent and the Lenders in writing prior to the
date hereof, since September 30, 1999, there has been no change
in the business, financial condition or results of operations of
AMRESCO and its Subsidiaries which could reasonably be expected
to have a Material Adverse Effect.
Section 6.6. Taxes. AMRESCO and its Subsidiaries have
filed all United States federal tax returns and all other tax
returns which are required to be filed and have paid all taxes
due pursuant to said returns or pursuant to any assessment
received by AMRESCO or any of its Subsidiaries, except such
taxes, if any, as are being contested in good faith and as to
which adequate reserves have been provided in accordance with
Agreement Accounting Principles. No tax liens have been filed
and no claims are being asserted with respect to any such taxes.
The charges, accruals and reserves on the books of AMRESCO and
its Subsidiaries in respect of any taxes or other governmental
charges are adequate. If AMRESCO or any of its Subsidiaries is a
limited liability company, each such limited liability company
qualifies for partnership tax treatment under United States
federal tax law.
Section 6.7. Litigation and Contingent Obligations.
There is no litigation, arbitration, governmental investigation,
proceeding or inquiry pending or, to the knowledge of any of
their respective officers, threatened against or affecting
AMRESCO or any of its Subsidiaries which could reasonably be
expected to have a Material Adverse Effect or which seeks to
prevent, enjoin or delay the making of any Loans. Other than any
liability incident to any litigation, arbitration or proceeding
which could not reasonably be expected to have a Material Adverse
Effect, no Borrower, Guarantor or Subsidiary has any material
Contingent Obligations not provided for or disclosed in the
financial statements referred to in Section 6.4.
Section 6.8. Subsidiaries. Schedule 7 contains an
accurate list of all Subsidiaries of AMRESCO as of the date of
this Agreement, setting forth for each Subsidiary its respective
jurisdiction of organization and the percentage of its respective
capital stock or other ownership interests owned by AMRESCO
and/or other Subsidiaries. All of the issued and outstanding
shares of capital stock or other ownership interests of such
Subsidiaries have been (to the extent such concepts are relevant
with respect to such ownership interests) duly authorized and
issued and are fully paid and non-assessable.
Section 6.9. ERISA. The Unfunded Liabilities of all
Single Employer Plans do not in the aggregate exceed $500,000.
Neither AMRESCO nor any other member of the Controlled Group has
incurred, or is reasonably expected to incur, any withdrawal
liability to Multiemployer Plans in excess of $500,000 in the
aggregate. Each Plan complies in all material respects with all
applicable requirements of law and regulations, no Reportable
Event has occurred with respect to any Plan, neither AMRESCO nor
any other member of the Controlled Group has withdrawn from any
Plan or initiated steps to do so, and no steps have been taken to
reorganize or terminate any Plan.
Section 6.10. Accuracy of Information. No information,
exhibit or report furnished by any Borrower or any of their
Subsidiaries to the Administrative Agent or to any Lender in
connection with the negotiation of, or compliance with, the Loan
Documents, viewed in their totality insofar as any one or more of
such items must be construed together, contains any material
misstatement of fact or omits to state a material fact or any
fact necessary to make the statements contained therein not
misleading.
Section 6.11. Purpose of Credit; Regulation U. Borrowers
and Guarantors will use the proceeds of the Credit Facilities for
the purposes stated in Section 2.1(a) and in connection with the
conduct of the business AMRESCO and its Susidiaries as provided
in Section 7.4. No part of the proceeds of the Credit Facilities
will be used, directly or indirectly, for a purpose which
violates any law, rule or regulation. Borrowers and Guarantors
will not, directly or indirectly, use any of the proceeds of any
of the Credit Facilities for the purpose of purchasing or
carrying, or retiring any Indebtedness which was originally
incurred to purchase or carry, any "margin stock" as defined in
the Margin Regulations, or to purchase or carry any "security
that is publicly-held" within the meaning of Regulation T of the
Board of Governors of the Federal Reserve System, or otherwise
take or permit any action which would involve a violation of the
Margin Regulations or any other regulation of such Board of
Governors. The Credit Facilities are not secured, directly or
indirectly, in whole or in part, by collateral that includes any
"margin stock" within the meaning of the Margin Regulations. No
Borrower or Guarantor will engage principally, or as one of its
important activities, in the business of extending credit for the
purpose of purchasing or carrying any "margin stock" within the
meaning of the Margin Regulations.
Section 6.12. Material Agreements. Neither AMRESCO nor
any of its Subsidiaries is in default in the performance,
observance or fulfillment of any of the obligations, covenants or
conditions contained in (i) any agreement to which it is a party,
or (ii) any agreement or instrument evidencing or governing
Indebtedness, which default could, as to either (i) or (ii),
reasonably be expected to have a Material Adverse Effect or, with
respect to the applicable Borrower or Guarantor party thereto, a
material adverse effect on such Borrower's or Guarantor's
financial condition or ability to conduct its business
operations.
Section 6.13. Compliance With Laws. AMRESCO and its
Subsidiaries have complied in all material respects with all
applicable statutes, rules, regulations, orders and restrictions
of any domestic or foreign government or any instrumentality or
agency thereof having jurisdiction over the conduct of their
respective businesses or the ownership of their respective
Property except for any failure to comply with any of the
foregoing which could not reasonably be expected to have a
Material Adverse Effect.
Section 6.14. Ownership of Properties. Except as set
forth on Schedule 8, on the date of this Agreement, AMRESCO and
its Subsidiaries will have good title, free of all Liens other
than those permitted by Section 7.15(a), to all of the Property
and assets reflected in AMRESCO's most recent consolidated
financial statements provided to the Administrative Agent as
owned by AMRESCO and its Subsidiaries. Each of the Borrowers and
Guarantors has good and indefeasible title to all of the
Collateral and all other assets reflected on the most current
financial statements of AMRESCO and most recent Pledged Asset
Schedule and Certification delivered to Lenders. Except for
Permitted Encumbrances and other Liens permitted by
Section 7.15(a), there is no Lien on any property of any Borrower
or any Guarantor, and the execution, delivery, performance and
observance of the Loan Documents will not require or result in
the creation of any Lien (except Lenders' Liens) on any such
property. Each of the Borrowers and Guarantors has properly
granted to Lenders a perfected security interest or lien in all
Assigned Loans and other Collateral and a valid first lien on all
Mortgaged Properties (subject, in the case of the Mortgaged
Properties, to Section 5.4) owned by such Borrower or such
Guarantor, which have not been previously released pursuant to
the terms of the applicable Custodial Agreement. Borrowers and
Guarantors have requested as an accommodation to Borrowers and
Guarantors because of the number of Assigned Loans and for ease
of administering the Credit Facilities that the Assigned Loans be
endorsed by using an allonge endorsement, and Borrowers and
Guarantors acknowledge that, if an allonge endorsement is so used
in connection with an Assigned Loan, Borrowers and Guarantors
intend such endorsement to be a part of the Assigned Loan as
fully as if such endorsement were made on the instrument itself.
Section 6.15. Plan Assets; Prohibited Transactions. No
Borrower is an entity deemed to hold "plan assets" within the
meaning of 29 C.F.R. 2510.3-101 of an employee benefit plan (as
defined in Section 3(3) of ERISA) which is subject to Title I of
ERISA or any plan (within the meaning of Section 4975 of the
Code), neither the execution of this Agreement nor the making of
Loans hereunder gives rise to a prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Code, and
"benefit plan investors" (as defined in 29 C.F.R. 2510.3-
101(f)) do not own 25% or more of the value of any class of
equity interests in AMRESCO.
Section 6.16. Environmental Matters. In the ordinary
course of its business, the officers of AMRESCO consider the
effect of Environmental Laws on the business of AMRESCO and its
Subsidiaries, in the course of which they identify and evaluate
potential risks and liabilities accruing to Borrowers or
Guarantors due to Environmental Laws. On the basis of this
consideration, AMRESCO has concluded that Environmental Laws
cannot reasonably be expected to have a Material Adverse Effect.
Neither AMRESCO nor any Subsidiary has received any notice to the
effect that its operations are not in material compliance with
any of the requirements of applicable Environmental Laws or are
the subject of any federal or state investigation evaluating
whether any remedial action is needed to respond to a release of
any toxic or hazardous waste or substance into the environment,
which non-compliance or remedial action could reasonably be
expected to have a Material Adverse Effect.
Section 6.17. Investment Company; Investment Advisor. No
Borrower, Guarantor or other Subsidiary is an "investment
company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as
amended. No Borrower, Guarantor or other Subsidiary (other than
AMRESCO Advisors, Inc.) is an "investment advisor" or an advisor
"controlled" by an "investment company", within the meaning of
the Investment Advisors Act of 1940 as amended.
Section 6.18. Public Utility Holding Company Act. Neither
AMRESCO nor any Subsidiary is a "holding company" or a
"subsidiary company" of a "holding company", or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding
company", within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
Section 6.19. Year 2000. AMRESCO has made a full and
complete assessment of any potential Year 2000 Problems and has a
realistic and achievable program for remediating such Year 2000
Problems on a timely basis, which program has been implemented
and completed prior to the date hereof (the "Year 2000 Program").
Based on such assessment and on the Year 2000 Program, Borrowers
do not reasonably anticipate that Year 2000 Problems will have a
Material Adverse Effect.
Section 6.20. Subordinated Indebtedness; Other
Indebtedness. The Obligations constitute senior indebtedness
which is entitled to the benefits of the subordination provisions
of all outstanding Subordinated Indebtedness. No Borrower or
Guarantor is an obligor on any Indebtedness other than
Indebtedness permitted by Section 7.11. No Borrower or Guarantor
is (nor will any Borrower or any Guarantor ever become) an
obligor on any Indebtedness of any Excluded Subsidiary or any
Foreign Subsidiary, and none of the assets of any Borrower or any
Guarantor have been pledged to secure, or otherwise given as
security for, any Indebtedness of any Excluded Subsidiary.
Section 6.21. Insurance. Each Borrower and each Guarantor
maintains with financially sound, responsible and reputable
insurance companies or associations (or, as to workers'
compensation or similar insurance, with an insurance fund or by
self-insurance authorized by the jurisdictions in which it
operates) insurance concerning its properties and business
against such casualties and contingencies and of such types and
in such amounts (and with co-insurance and deductibles) as is
customary for the same or similar businesses. The certificate
signed by an Authorized Accounting Officer that attests to the
existence and adequacy of, and summarizes, the property and
casualty insurance program carried by AMRESCO with respect to
itself and its Subsidiaries and that has been furnished by
AMRESCO to the Administrative Agent and the Lenders, is complete
and accurate. This summary includes the insurer's or insurers'
name(s), policy number(s), expiration date(s), amount(s) of
coverage, type(s) of coverage, and deductibles. This summary
also includes similar information, and describes any reserves,
relating to any self-insurance program that is in effect.
Section 6.22. Solvency. (i) Immediately after the
consummation of the transactions to occur on the date hereof and
immediately following the refinancing of amounts outstanding
under the Existing Credit Agreement hereunder and the making of
each Loan or Advance, if any, made on the date hereof, and after
giving effect to the application of the proceeds of such
refinancing and Loans and Advances, (a) the fair value of the
assets of AMRESCO and its Subsidiaries on a consolidated basis,
at a fair valuation, will exceed the debts and liabilities,
subordinated, contingent or otherwise, of AMRESCO and its
Subsidiaries on a consolidated basis; (b) the present fair
saleable value of the Property of AMRESCO and its Subsidiaries on
a consolidated basis will be greater than the amount that will be
required to pay the probable liability of AMRESCO and its
Subsidiaries on a consolidated basis on their debts and other
liabilities, subordinated, contingent or otherwise, as such debts
and other liabilities become absolute and matured; (c) AMRESCO
and its Subsidiaries on a consolidated basis will be able to pay
their debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and
matured; and (d) AMRESCO and its Subsidiaries on a consolidated
basis will not have unreasonably small capital with which to
conduct the businesses in which they are engaged as such
businesses are now conducted and are proposed to be conducted
after the date hereof.
(ii) AMRESCO does not intend to, or to permit any of
its Subsidiaries to, and does not believe that it or any of its
Subsidiaries will, incur debts beyond its ability to pay such
debts as they mature, taking into account the timing of and
amounts of cash to be received by it or any such Subsidiary and
the timing of the amounts of cash to be payable on or in respect
of its Indebtedness or the Indebtedness of any such Subsidiary.
Section 6.23. Lend Lease Agreement. The copy of the Lend
Lease Agreement delivered to the Lenders is a true and correct
copy thereof, and, as of the date hereof, the Lend Lease
Agreement is in full force and effect, is not in default, has not
been modified or amended and is enforceable against all parties
thereto in accordance with its terms.
Section 6.24. Licenses. Borrowers and Guarantors possess,
and are materially in compliance with all requirements and in
good standing under, all licenses, permits, franchises, consents,
authorizations and exemptions required by any Legal Requirement
or otherwise necessary to conduct their respective businesses,
including without limitation, to the extent required or necessary
for the operation of any Borrower's or Guarantor's business on a
basis comparable to its operations as currently conducted, all
licenses and authorizations necessary to participate as a lender
under the programs of the Federal National Mortgage Association,
the Federal Home Loan Mortgage Corporation, the Government
National Mortgage Association and the U.S. Small Business
Administration (collectively, the "Federal Lending Programs"),
and all licenses contemplated to be transferred to Lend Lease
under the Lend Lease Agreement, except for violations (other than
with respect to such licenses and authorizations under the
Federal Lending Programs or those intended to be transferred to
Lend Lease) that would not (either individually or collectively)
have a material adverse effect on the financial condition or
operations of any Borrower or any Guarantor.
Section 6.25. Servicing Rights. Borrowers, Guarantors and
all other Subsidiaries are materially in compliance with all
servicing agreements and contracts to which any of them is a
party, and no default exists on their part thereunder that could
result in a replacement or termination of the applicable
Borrower, Guarantor or other Subsidiary as servicer. No
Borrower, Guarantor or other Subsidiary has received notice that,
or otherwise has actual knowledge that, the trustee or other
applicable party under any such servicing agreement or contract
intends to replace, or to terminate the rights and interests of,
such Borrower, Guarantor or Subsidiary as servicer thereunder.
ARTICLE VII
COVENANTS
During the term of this Agreement, and until full and final
payment of all the Notes and Obligations and termination of the
Revolving Commitment, unless the Required Lenders shall otherwise
consent in writing:
Section 7.1. Financial Reporting. Each Borrower will
maintain, for itself and each of its Subsidiaries, a system of
accounting established and administered in accordance with
generally accepted accounting principles, and AMRESCO, for itself
and on behalf of the other Borrowers, the Guarantors and its
other Subsidiaries, will furnish to Administrative Agent and each
of the Lenders:
(i) Within 95 days after the close of each of
AMRESCO's fiscal years, an unqualified audit report certified by
independent certified public accountants acceptable to
Administrative Agent, prepared in accordance with Agreement
Accounting Principles on a consolidated and consolidating basis
(consolidating statements need not be certified by such
accountants) for AMRESCO and each of its Subsidiaries, including
balance sheets as of the end of such period, related profit and
loss and reconciliation of surplus statements, and a statement of
cash flows, setting forth in each case in comparative form the
figures as of the end of and for the previous fiscal year,
accompanied by any management letter prepared by said
accountants.
(ii) Within 50 days after the last day of each fiscal
quarter, for AMRESCO and its Subsidiaries, consolidated and
consolidating unaudited balance sheets as at the close of each
such period and consolidated and consolidating profit and loss
and reconciliation of surplus statements and a statement of cash
flows for such fiscal quarter and for the period from the
beginning of the current fiscal year to the end of such fiscal
quarter, all certified by an Authorized Accounting Officer.
(iii) Within 25 days after the last day of each
calendar month, for AMRESCO and its Subsidiaries, the
consolidated and consolidating unaudited balance sheets as of the
end of such month, and income statements for such month and for
the period from the beginning of the current fiscal year to the
end of such month, all certified by an Authorized Accounting
Officer.
(iv) INTENTIONALLY OMITTED.
(v) Together with the financial statements required
under Sections 7.1(i), (ii) and (iii), a compliance certificate
in substantially the form of Exhibit B signed by an Authorized
Officer of AMRESCO showing the calculations necessary to
determine compliance with this Agreement, and stating that no
Default or Event of Default exists, or if any Default or Event of
Default exists, stating the nature and status thereof.
(vi) As soon as available, but in any event within 50
days after the end of each fiscal quarter of AMRESCO, a Residual
Interests Report.
(vii) As soon as available, but in any event within
50 days after the end of each fiscal quarter of AMRESCO, an
organizational chart of AMRESCO and all of its direct and
indirect Subsidiaries, and if a new Subsidiary is reflected
thereon, separate written notification thereof, together with an
updated Schedule 6 listing all Excluded Subsidiaries and the
investments of AMRESCO or any of its Subsidiaries in the Excluded
Subsidiaries.
(viii) Within 25 days after the end of each calendar
month, an Interest Rate Exposure Report as of the last day of
such month.
(ix) On or before the 25th day of each calendar month,
certified calculations of the Borrowing Base (including the
respective Borrowing Base for the Revolving Credit Facility and
the Term Loan Facilities after the Transition Date) and
compliance with the Borrowing Base Coverage Ratio(s) required
under Section 7.24.4 as of the last day of the immediately
preceding calendar month, in the form of Schedules 10, 11, or 12,
as applicable, certified by an Authorized Accounting Officer
(each a "Borrowing Base Certificate").
(x) As soon as available, but in any event within 50
days after the end of each fiscal quarter of AMRESCO, a report in
form acceptable to Administrative Agent detailing any loans which
had been sold or securitized by any Borrower, any Guarantor or
any other Subsidiary, but which were repurchased by such Person
if the amount of such loans so repurchased exceeds $2,000,000 in
the aggregate during such quarter, together with an explanation
of the reasons for such required repurchases.
(xi) As soon as available, but in any event within 25
days after the end of each calendar month, a Permitted Debt
Report and Certification, a Pledged Asset Schedule and
Certification, a delinquency report in form satisfactory to
Administrative Agent showing the amount and number of loans (on
an aggregate basis) which have been originated, acquired and/or
securitized by any Borrower or any Subsidiary (but excluding
loans contained in Managed Asset Portfolios) and are past due,
have been determined to be uncollectible and charged off or are
involved in a bankruptcy.
(xii) As soon as possible and in any event within
10 days after AMRESCO knows that any Reportable Event has
occurred with respect to any Plan, a statement, signed by an
Authorized Officer of AMRESCO, describing said Reportable Event
and the action which AMRESCO proposes to take with respect
thereto.
(xiii) As soon as possible and in any event within
10 days after receipt by any Borrower, a copy of (a) any notice
or claim to the effect that AMRESCO or any of its Subsidiaries is
or may be liable to any Person as a result of the release by any
Borrower, any of its Subsidiaries, or any other Person of any
toxic or hazardous waste or substance into the environment, and
(b) any notice alleging any violation of any federal, state or
local environmental, health or safety law or regulation by
AMRESCO or any of its Subsidiaries, which, in either case, could
reasonably be expected to have a Material Adverse Effect.
(xiv) Promptly upon the furnishing thereof to the
shareholders of AMRESCO, copies of all financial statements,
reports and proxy statements so furnished.
(xv) Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly or other
regular reports filed by or on behalf of AMRESCO or any of its
Subsidiaries with the Securities and Exchange Commission.
(xvi) On or before the 25th day of each calendar
month, an updated description of the Assigned Loans in the
Structured Real Estate Portfolio, and the unfunded commitments
with respect thereto, in the form of Schedule 14, together with a
report detailing any amendments, modifications or waivers to or
regarding any Assigned Loan in the Structured Real Estate
Portfolio, the effect of which is to extend the maturity or date
for any principal payment thereon, or to reduce or otherwise
restructure the amount or timing of any payment thereon.
(xvii) Such other information (including
non-financial information) as the Administrative Agent may from
time to time reasonably request, including without limitation a
listing of all assets in the Managed Asset Portfolios (such
listing not to be requested more often than once in each calendar
month if no Default or Event of Default has occurred), and
information regarding Warehouse Lines and other Indebtedness, and
the renewal or refinancing thereof.
Section 7.2. Use of Proceeds. The Borrowers and
Guarantors will, and will cause each Subsidiary to, use the
proceeds of the Credit Facilities for the purposes set forth in
Section 2.1 and as represented in Section 6.11 and each Borrowing
Notice. The Borrowers will not, nor will they permit any
Guarantor or other Subsidiary to, use any of the proceeds of the
Credit Facilities to purchase or carry any "margin stock" (as
defined in Regulation U) or to make any Acquisition.
Section 7.3. Notice of Default and Material Matters.
AMRESCO will give prompt notice in writing to the Lenders of
(a) the occurrence of any Default or Event of Default, (b) any
information received or known by any Borrower or any Guarantor
regarding the non-renewal or failure to extend or refinance any
Warehouse Line or other Indebtedness of any Borrower or any
Guarantor that is necessary for the operations of such Borrower
or Guarantor, (c) any information received or known by any
Borrower or any Guarantor regarding the default by or replacement
of any Borrower, Guarantor or other Subsidiary under any
servicing agreement to which it is a party, (d) the termination
of any licensing of any applicable Borrower, Guarantor or other
Subsidiary under any Federal Lending Program, or any information
received or known by any Borrower or any Guarantor regarding any
noncompliance by any applicable Borrower or Guarantor under, or
any corrective actions or measures, or status changes taken with
respect to any applicable Borrower or Guarantor under, any
Federal Lending Program, (e) the occurrence of any default or
breach under, or any termination of, the Lend Lease Agreement, or
receipt of notice regarding same, and (f) any other development,
financial or otherwise (including, without limitation,
developments with respect to Year 2000 Problems), which could
reasonably be expected to have a Material Adverse Effect.
Section 7.4. Conduct of Business. The Borrowers will,
and will cause each Subsidiary to, carry on and conduct its
business in a substantially similar manner and in a substantially
similar field of enterprise as it is presently conducted, other
than as contemplated under the Lend Lease Agreement, or the
Specified Asset Release Agreement, or in connection with the
liquidation and termination of the Discontinued Operations, and
to do all things necessary to remain duly incorporated or
organized, validly existing and (to the extent such concept
applies to such entity) in good standing as a domestic
corporation, partnership or limited liability company in its
jurisdiction of incorporation or organization, as the case may
be, and maintain all requisite authority to own and lease its
Property and conduct its business in each jurisdiction in which
its Property is located or its business is conducted.
Section 7.5. Taxes. The Borrowers will, and will cause
each Subsidiary to, timely file complete and correct United
States federal and applicable foreign, state and local tax
returns required by law and pay when due all taxes, assessments
and governmental charges and levies upon it or its income,
profits or Property, except those which are being contested in
good faith by appropriate proceedings and with respect to which
adequate reserves have been set aside in accordance with
Agreement Accounting Principles. At any time that any
Subsidiary is organized as a limited liability company, each such
limited liability company will qualify for partnership tax
treatment under United States federal tax law.
Section 7.6. Insurance. The Borrowers will, and will
cause all Subsidiaries to, maintain with financially sound and
reputable insurance companies insurance on all their Property in
such amounts and covering such risks as is consistent with sound
business practice or is customarily carried by businesses
similarly situated, and AMRESCO will furnish to Administrative
Agent or any Lender upon request full information as to the
insurance carried.
Section 7.7. Compliance with Laws. The Borrowers will,
and will cause the Subsidiaries to, comply with all laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or
awards to which any of them it may be subject, including without
limitation all Environmental Laws, except to the extent the
failure to so comply alone or in the aggregate would not have a
Material Adverse Effect.
Section 7.8. Maintenance of Properties. The Borrowers
will, and will cause the Subsidiaries to, do all things necessary
to maintain, preserve, protect and keep their Property in good
repair, working order and condition, and make all necessary and
proper repairs, renewals and replacements so that its business
carried on in connection therewith may be properly conducted at
all times.
Section 7.9. Inspection. The Borrowers will, and will
cause the Subsidiaries to, permit the Administrative Agent and
the Lenders, by their respective representatives and agents, with
reasonable notice, to inspect any of the Property, books and
financial records of the Borrowers and all Subsidiaries, to
examine and make copies of the books of accounts and other
financial records of any Borrower or any Subsidiary, and to
discuss the affairs, finances and accounts of any Borrower or any
Subsidiary with, and to be advised as to the same by, their
respective officers at such reasonable times and intervals as the
Administrative Agent or any Lender may designate. Without
limiting the foregoing, Administrative Agent may conduct, or
cause to be conducted by its consultants and/or attorneys, a
review of the assets comprising the Borrowing Base, including the
valuation thereof, and the validity and priority of the Lenders'
Liens with respect thereto, provided that unless a Default or an
Event of Default has occurred, any such review and valuation by
consultants (except for legal review) shall not be performed more
frequently than once in any calendar quarter.
Section 7.10. Dividends; Purchase of Stock. The Borrowers
will not, and they will not permit any Subsidiary to, declare or
pay any dividends or make any distributions on the capital stock
of any Borrower or any Subsidiary (other than dividends payable
in its own capital stock) or redeem, repurchase or otherwise
acquire or retire any capital stock of any Borrower or any
Subsidiary at any time outstanding, except that any Subsidiary
may declare and pay dividends or make distributions to a Borrower
or a Guarantor, and AMRESCO may issue Permitted Preferred Stock.
Neither AMRESCO nor any other Borrower, any Guarantor, or any
Subsidiary shall purchase any of the stock or other equity
securities of AMRESCO.
Section 7.11. Indebtedness. The Borrowers will not, nor
will they permit any Subsidiary to, create, incur or suffer to
exist any Indebtedness, except the following:
(a) The Loans and other Obligations hereunder.
(b) Indebtedness existing on the date hereof, all
which existing Indebtedness (other than (i) trade payables and
(ii) Contingent Obligations that are not reasonably quantifiable
by Borrowers) is described in Schedule 8, and any renewals or
extensions of such Indebtedness, or refinancing of such
Indebtedness in comparable amounts and on comparable terms
generally.
(c) Indebtedness arising under Rate Hedging Agreements
related to the operations of the Borrowers and Guarantors,
provided that any such Rate Hedging Agreements are unsecured,
except for (i) cash collateral deposits securing Rate Hedging
Obligations other than those under the Facility Foreign Currency
Exchange Agreements, in a maximum amount of $10,000,000, and
(ii) Liens in favor of an FX Lender or any other Lender or an
Affiliate of a Lender, securing Rate Hedging Obligations owed to
such Lender (or its Affiliate) pursuant to the terms hereof and
of the Security Documents.
(d) Warehouse Lines.
(e) Trade payables of the Borrowers and the Guarantors
and their Subsidiaries incurred in the ordinary course of
business which are due and payable, and are customarily paid,
within sixty (60) days of the incurrence thereof.
(f) Contingent Obligations in the form of indemnity
obligations or typical repurchase obligations related to the sale
by any Borrower (other than AMRESCO) or any Guarantor of assets
in the ordinary course of its business, including the
securitization of loans which are expressly permitted hereunder.
Section 7.12. Mergers and Consolidations. The Borrowers
will not, and they will not permit any Subsidiary to, merge or
consolidate with or into any other Person, except that a
Subsidiary may merge into a Borrower or a Guarantor, or into
another Person which also becomes a "Borrower" or a "Guarantor"
under this Agreement and delivers all Loan Documents required by
this Agreement and otherwise complies with Section 5.1.3, and an
Excluded Subsidiary may merge into a similar type of Excluded
Subsidiary, and in the case of a consolidation or merger by any
Subsidiary that is not a Borrower into a Borrower, the applicable
Borrower will remain the direct or indirect owner of all of the
outstanding capital stock and other equity securities of the
continuing or surviving corporation.
Section 7.13. Sale of Assets. The Borrowers will not, and
they will not permit any Guarantor or any Subsidiary to, lease,
sell or otherwise dispose of their Property to any other Person,
except:
(a) Sales or settlements of Assigned Loans or any
other loans or indebtedness owned or held by any Subsidiary of
AMRESCO or any other Borrower in the orderly liquidation of the
assets of the Discontinued Operations, the proceeds of which are
paid to Administrative Agent for the benefit of Lenders as
provided in Section 2.2.2 and Section 5.7.2;
(b) Sales of Mortgaged Properties or any other real
estate owned by any Subsidiary of AMRESCO or any other Borrower
in the orderly liquidation of the assets of the Discontinued
Operations, the proceeds of which are paid to Administrative
Agent for the benefit of the Lenders as provided in Section 2.2.2
and Section 5.7.2.
(c) Sale of the assets under and pursuant to the Lend
Lease Agreement, subject to Sections 2.2.1(a) and (b) and
Section 5.7.5 and and other provisions hereof;
(d) Sales of Assigned Loans in the Structured Real
Estate Portfolio, subject to Sections 2.2.1(c) and 5.7.4 and
other applicable provisions of this Agreement; and
(e) Sale of assets contemplated in, and in accordance
with the terms of, this Agreement described in Section 5.7,
including without limitation, (i) sales of assets of the
Subsidiaries engaged in Continuing Operations in the ordinary
course of business, and (ii) sales of assets covered by the
Specified Asset Release Agreement, the proceeds of which are paid
to Administrative Agent for the benefit of Lenders as provided in
Section 2.2.
Except with respect to sales permitted under the foregoing
clauses (a) through (e), no Borrower, Guarantor or Subsidiary
shall sell, lease, abandon or otherwise transfer all or a
material part of its assets to any Person, in one or a series of
related transactions.
.
Section 7.14. Investments and Acquisitions. The Borrowers
will not, and they will not permit any Subsidiary to, make or
suffer to exist any Investments (including without limitation,
loans and advances to, and other Investments in, Subsidiaries or
in partnerships or joint ventures), or commitments therefor, or
to create any Subsidiary or to become or remain a partner in any
partnership or joint venture, or to make any Acquisition of any
Person, except:
(a) Cash Equivalent Investments.
(b) Existing Investments in domestic Subsidiaries
(whether or not evidenced by Inter-Company Notes) and other
Investments in existence on the date hereof and described in
Schedule 9-A, and Investments made after the date hereof in the
ordinary course of business in existing domestic Subsidiaries
that are Borrowers or Guarantors. Schedule 9-B contains a
description, including the principal face amount and outstanding
principal balance, of each Inter-Company Note in existence on the
date hereof.
(c) Investments in (including the creation of) new
domestic Subsidiaries in the ordinary course of business so long
as the business of any such new Subsidiary is in the same lines
of business of the Borrowers and Guarantors, as approved by
Administrative Agent, and such new Subsidiary becomes a Borrower
(or a Guarantor if not legally permitted to be a Borrower)
pursuant to Section 5.1.3, except in the case of new Excluded
Subsidiaries formed as bankruptcy - remote special purpose
entities formed in connection with the securitization of assets
by Subsidiaries engaged in Continuing Operations.
.
(d) Existing Investments in Foreign Subsidiaries
described on Schedule 9-A and which are evidenced by Foreign
Subsidiary Inter-Company Notes that have been duly assigned to
and delivered to Administrative Agent for the benefit of the
Lenders, and Investments made after the date hereof only for
operating expenses of existing Foreign Subsidiaries incurred in
the ordinary course of business. Schedule 9-B contains a
description, including the principal face amount and outstanding
principal balance, of each Foreign Subsidiary Inter-Company Note.
(e) The funding of the unfunded loan commitments and
cost overruns of AMRESCO Commercial Finance Inc. and AMRESCO
Funding Canada Inc. in respect of the Assigned Loans in the
Structured Real Estate Portfolio, the amounts of such unfunded
commitments on the date hereof being as set forth on Schedule 14.
(f) The funding of the unfunded loan commitments, cost
overruns and expenses incurred in the ordinary course of business
with respect to such assets of any Borrower or Guarantor related
to the Assigned Loans in the Managed Asset Portfolios.
(g) The making and funding of loans in the ordinary
course of business by Borrowers or Guarantors or other
Subsidiaries that are in the business of lending money to other
Persons.
(h) The MIC Notes, and any other loans in an aggregate
amount not exceeding $1,500,000 to any employees of Borrowers or
Guarantors or any Subsidiaries to facilitate relocations or for
other purposes.
(i) The Lend Lease Holdback Note.
(j) Any promissory note issued to AMRESCO or another
Borrower as specifically permitted in the Specified Asset Release
Agreement, subject to the terms thereof.
Notwithstanding the foregoing, in no event shall any
Investment permitted pursuant to this Section 7.14 be permitted
if (i) there shall exist a Default or Event of Default, or
(ii) if after giving effect to any such Investment, Borrowers
shall not be in compliance with any covenant set forth herein or
in the other Loan Documents.
Section 7.15. Liens. (a) The Borrowers will not, nor will
they permit any Subsidiary to, create, incur, or suffer to exist
any Lien in, of, or on the Property of the Borrowers or the
Guarantors or any Subsidiary, except:
(i) Liens for taxes, assessments or governmental
charges or levies on their Property if the same shall not at the
time be delinquent or thereafter can be paid without penalty, or
are being contested in good faith and by appropriate proceedings
and for which adequate reserves in accordance with Agreement
Accounting Principles shall have been set aside on their books.
(ii) Liens imposed by law, such as carriers',
warehousemen's and mechanics' liens and other similar liens
arising in the ordinary course of business which secure payment
of obligations not more than 60 days past due or which are being
contested in good faith by appropriate proceedings and for which
adequate reserves shall have been set aside on their books.
(iii) Liens arising out of pledges or deposits
under worker's compensation laws, unemployment insurance, old age
pensions, or other social security or retirement benefits, or
similar legislation.
(iv) Utility easements, building restrictions and such
other encumbrances or charges against real property as are of a
nature generally existing with respect to properties of a similar
character and which do not in any material way affect the
marketability of the same or interfere with the use thereof in
the business of AMRESCO or its Subsidiaries.
(v) Liens existing on the date hereof and securing
Indebtedness described in Schedule 8, as such Liens are described
in Schedule 8.
(vi) Liens in favor of the Lenders, or the
Administrative Agent for the benefit of the Lenders, granted
pursuant to this Agreement or any Security Document.
(vii) Liens on the Collateral in favor of an FX
Lender (and all Lenders upon the making of any Advance for
Settlement Payments) securing Rate Hedging Obligations owed to
such Lender; Liens on the Collateral in favor of any Lender or an
Affiliate of a Lender securing any other Rate Hedging Obligations
owed to any such Lender or Affiliate of a Lender (which Liens
shall be subordinate to those in favor of Lenders securing the
Credit Facilities); and Liens on cash collateral deposits
securing other Rate Hedging Obligations as permitted under
Section 7.11(c).
(viii) The Permitted Encumbrances.
(ix) With respect to computer and other office
equipment or inventory,
(A) landlord's Liens arising in
the ordinary course of any Borrower's or any
Subsidiary's business, and
(B) Purchase money liens in the
ordinary course of business.
(x) Liens securing Warehouse Lines.
(xi) Liens involuntarily filed against any asset of any
Borrower or any Subsidiary, provided, that within fifteen (15)
days after such filing, the applicable Borrower or Subsidiary has
obtained a release of any such Lien or is contesting the filing
of such Lien in good faith and an adequate bond has been obtained
to satisfy in full any claim which such Lien secures.
(b) Borrowers shall not, and Borrowers shall not permit any
Subsidiary (except Excluded Subsidiaries) to, enter into any
agreement (excluding this Agreement or any other Loan Documents)
prohibiting the creation or assumption of any Lien upon any
Property, revenues, or assets of such Person, whether now owned
or hereafter acquired, except (i) agreements in existence on the
date hereof under the terms of Indebtedness in effect on the date
hereof described in Schedule 8 and the collateral pledged as
security therefor, (ii) such limitations as are imposed by
applicable law (including without limitation Small Business
Association regulations applicable to AMRESCO Independence
Funding, Inc.), and (iii) such other agreements as to which
Administrative Agent receives prior written notice and that are
on terms acceptable to Administrative Agent in its sole and
absolute discretion.
Section 7.16. Year 2000. AMRESCO shall promptly notify
Lenders in writing in the event of any potential Year 2000
Problem. Such written notice shall specify and describe in
detail the nature of the Year 2000 Problem, including a
description of the equipment or systems involved, and the event
causing such Year 2000 Problem.
Section 7.17. Affiliates. Borrowers will not, and will
not permit any Subsidiary to, enter into any transaction
(including, without limitation, the purchase or sale of any
Property or service) with, or make any payment or transfer to,
any Affiliate except in the ordinary course of business and
pursuant to the reasonable requirements of the applicable
Borrower's or Subsidiary's business and upon fair and reasonable
terms no less favorable to such Borrower or such Subsidiary than
such Borrower or such Subsidiary would obtain in a comparable
arms-length transaction.
Section 7.18. Subordinated Indebtedness. The Borrowers
will not, and will not permit any Subsidiary to, make any
amendment or modification to the indenture, note or other
agreement evidencing or governing any Subordinated Indebtedness,
or directly or indirectly voluntarily prepay, defease or in
substance defease, purchase, repurchase, redeem, retire or
otherwise acquire, any Subordinated Indebtedness; provided that
the entering into of a contract pursuant to which AMRESCO has
the right to purchase or otherwise acquire a portion of the
Subordinated Indebtedness after the Revolving Credit Termination
Date shall not be a violation of this Section 7.18 so long as no
purchases, repurchases or other acquisitions of Subordinated
Indebtedness in respect thereof are made until full and final
payment of the Obligations and termination of the Revolving
Credit Facility and this Agreement.
Section 7.19. Lend Lease Agreement. The Lend Lease
Agreement shall not be modified or amended in any manner that
affects the financial terms thereof in any manner adverse as to
the sellers thereunder, or that affects in any way the provisions
hereof related to the Lend Lease Agreement, or in any other
material respect, without prior notice to Administrative Agent
and the Lenders and consent of the Required Lenders. Borrowers
shall promptly deliver to Administrative Agent any and all
amendments, modifications or supplements to the Lend Lease
Agreement (regardless of whether the Required Lenders' consent
was required therefor), and any notices of default or other
material notification received or sent by the sellers thereunder.
Each Borrower and each Guarantor that is a party to the Lend
Lease Agreement shall comply with the terms and provisions
thereof and will take all reasonable actions, and will use its
best faith efforts, to close the transactions contemplated
thereby as soon as possible. On the Lend Lease Closing Date,
Borrowers shall deliver to Administrative Agent the original
executed Lend Lease Holdback Note, together with an executed
allonge endorsement in blank for such note.
Section 7.20. Servicing Agreement. The Servicing
Agreement entered into with respect to the servicing of certain
assets of certain Subsidiaries after the Lend Lease Closing Date
shall be substantially in the form attached as an exhibit to the
Lend Lease Agreement, and such Servicing Agreement shall not be
modified in any material respect, nor shall the Servicer
thereunder be replaced, without the consent of Administrative
Agent. On the Lend Lease Closing Date, the Borrowers and/or
Guarantors party to the Servicing Agreement shall collaterally
assign their rights and benefits thereunder to Administrative
Agent, for the benefit of the Lenders pursuant to a collateral
assignment in form and substance reasonably acceptable to
Administrative Agent, and consented to by the Servicer.
Section 7.21. Contingent Obligations. The Borrowers will
not, nor will they permit any Subsidiary to, make or suffer to
exist any Contingent Obligation (including, without limitation,
any Contingent Obligation with respect to the obligations of a
Subsidiary, except (i) by endorsement of instruments for deposit
or collection in the ordinary course of business, (ii) for the
Guaranty, (iii) those reflected in the notes to the financial
statements delivered to Lenders as reflected in Section 6.4,
(iv) those permitted by Section 7.11, and (v) litigation claims
that do not result in an Event of Default under Section 8.1.9.
Section 7.22. INTENTIONALLY OMITTED.
Section 7.23. Maintenance of Corporate Existence. Other
than in connection with a consolidation or merger permitted under
Section 7.12 or the dissolution of any Borrower or any Guarantor
of which Administrative Agent has been notified and the
distribution of all of the assets of such Borrower or Guarantor
to another Borrower or Guarantor, no Borrower or Guarantor shall,
or permit any of its Subsidiaries to, terminate, or fail to
maintain, its corporate existence or qualification, as
applicable, in the state of its incorporation and any other
applicable jurisdiction where the business of such Guarantor
requires such qualification (provided that nothing herein shall
permit the dissolution of AMRESCO or the failure of each Borrower
to maintain its corporate existence and qualification to do
business as elsewhere required in this Agreement), or terminate,
or fail to maintain, its good standing and qualification to
transact business in all jurisdictions where the failure to
maintain its good standing or qualification to transact business
could have a Material Adverse Effect.
Section 7.24. Financial Covenants.
Section 7.24.1. Minimum Consolidated Tangible Net
Worth. Borrowers shall not at any time permit Consolidated
Tangible Net Worth to be less than (a) $180,000,000 until the
date (the "Change Date") that is the earlier to occur of March 1,
2000, and the first day of the calendar month following the
calendar month in which the Lend Lease Closing Date occurs, and
(b) from and after the Change Date, the greater of
(i) $320,000,000 and (ii) the sum of (x) 93% of Consolidated
Tangible Net Worth on the Change Date, plus (y) 90% of
Consolidated Net Income (without deduction if Consolidated Net
Income is less than $0.00) for each calendar month commencing
from and after the Change Date, plus (z) 100% of the net proceeds
(i.e. gross proceeds less reasonable and customary closing costs
and expenses) of any issuance of equity securities by any
Borrowers on or after the Change Date (exclusive of equity issued
to the CLC Earnout Recipients as an "earnout" in connection with
the CLC Transaction).
Section 7.24.2. Leverage Ratio. Borrowers shall
not, at any time, permit the ratio of (a) Total Consolidated
Indebtedness (including without duplication Contingent
Obligations) to (b) Consolidated Tangible Net Worth, to be
greater than (a) 8.75 to 1.00 prior to the Change Date, and
(b) 4.00 to 1.00 from and after the Change Date.
Section 7.24.3. Interest/Dividend Coverage Ratio.
Borrowers shall not permit the Interest/Dividend Coverage Ratio
to be less than (a) on December 31, 1999, .80 to 1.00, (b) from
January 1, 2000 though January 31, 2000, .85 to 1.00, (c) from
February 1, 2000 through February 29, 2000, 1.30 to 1.00, and
(d) from and after March 1, 2000, 1.35 to 1.00.
Section 7.24.4. Borrowing Base Requirement.
Borrowers shall not permit the Borrowing Base Coverage Ratio (as
indicated on Schedules 10, 11 and 12, as applicable) to be less
than (a) 1.05 to 1.00 prior to and on the Transition Date for all
the Credit Facilities as calculated pursuant to Schedule 10,
(b) 1.25 to 1.00 after the Transition Date for the Revolving
Credit Facility as calculated pursuant to Schedule 11, (c) 2.00
to 1.00 after the Transition Date through March 30, 2000 for the
Term Loan Facilities as calculated pursuant to Schedule 12, or
(d) 4.00 to 1.00 from and after March 31, 2000 for the Term Loan
Facilities as calculated pursuant to Schedule 12.
Section 7.24.5. Covenant Adjustment.
Administrative Agent shall have the right at any time after the
SREP Sale Date, in its sole discretion, to modify and adjust any
of the financial covenants in this Section 7.24, to the extent
and in a manner such that the new terms are comparable to such
covenants as now in effect after taking into account any change
in Borrowers' financial position as a result of the SREP Sale
Date having occurred; provided that any such adjustments shall
not impose less restrictive requirements on Borrowers and shall
not be made in order to pre-empt or prevent the occurrence of a
Default or an Event of Default. Any such modifications to the
provisions of Sections 7.24.1, 7.24.2, 7.24.3 and/or 7.24.4,
shall become effective upon notice thereof by Administrative
Agent to AMRESCO and the Lenders.
Section 7.25. Investment Company. The Borrowers will, and
will cause each Subsidiary which is an "investment company" or a
company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended (15
U.S.C.A. 80a, et. seq.) (the "Investment Company Act") or which
is otherwise subject to the Investment Company Act to be in
compliance with the Investment Company Act, including, without
limitation, 15 U.S.C.A. 80a-18(f)(1).
Section 7.26. Exceptions to Covenants. Neither any
Borrower nor any Guarantor shall take or permit to be taken any
action or fail to take any action which is permitted by any of
the covenants contained in this Agreement if such action or
omission would result in the breach of any other covenant
contained in this Agreement.
ARTICLE VIII
DEFAULTS AND REMEDIES
Section 8.1. Events of Default. The occurrence of any
one or more of the following conditions, circumstances or events
shall constitute an Event of Default:
Section 8.1.1. Any representation or warranty made or
deemed made by or on behalf of any Borrower, any Guarantor or any
Subsidiary to the Lenders or the Administrative Agent under or in
connection with this Agreement, any other Loan Document, any
Loan, or any certificate or information delivered in connection
with this Agreement or any other Loan Document shall be, or prove
to have been untrue in any material respect when made or deemed
to have been made or delivered.
Section 8.1.2. Nonpayment when due of any
principal of any Loan or Note, or of interest upon any Loan or
Note, or of any commitment fee or any other amount payable on any
of the Credit Facilities, or any other Obligations under any of
the Loan Documents.
Section 8.1.3. The breach by any Borrower, any
Guarantor or any other Subsidiary of any of the terms or
provisions of Sections 7.2, 7.3, 7.4, 7.9, 7.10, 7.11, 7.12,
7.13, 7.14, 7.15, 7.17, 7.18, 7.19, 7.20, 7.21, 7.22, 7.23, or
7.24; or any breach by AMRESCO of the terms and requirements of
Section 7.1 that is not cured within three (3) Business Days
after the occurrence thereof.
Section 8.1.4. The breach by any Borrower or any
Guarantor (other than a breach which constitutes an Event of
Default under another Section of this Article VIII) of any of the
terms or provisions of this Agreement or any other Loan Document
which is not remedied within ten (10) days after written notice
from the Administrative Agent or any Lender; provided, that if
such breach can be cured and such Borrower or Guarantor begins
and is diligently pursuing a cure thereof prior to the expiration
of the ten (10) day cure period above provided, then Borrowers
shall not be in default hereunder if such failure is cured within
twenty (20) days after the above provided written notice of such
breach.
Section 8.1.5. Failure of any Borrower or any
Subsidiary or any Guarantor to pay when due any Indebtedness
aggregating in excess of $250,000 ("Material Indebtedness"); or
the default by any Borrower or any Subsidiary or any Guarantor in
the performance (beyond the applicable grace period with respect
thereto, if any) of any term, provision or condition contained in
any agreement under which any such Material Indebtedness was
created or is governed, or any other event shall occur or
condition exist, the effect of which default or event or
condition is to cause, or to permit the holder or holders of such
Material Indebtedness to cause, such Material Indebtedness to
become due prior to its stated maturity; or any Material
Indebtedness shall be declared to be due and payable or required
to be prepaid or repurchased (other than by a regularly scheduled
payment) prior to the stated maturity thereof; or a payment or
purchase by AMRESCO or any Subsidiary, or, subject to the terms
of Section 7.18, the approval of the board of directors of
AMRESCO or any Subsidiary for the payment or purchase, of amounts
under any Subordinated Indebtedness or publicly held senior
unsecured debt in excess of the regularly scheduled payments, or
which would otherwise cause a violation by AMRESCO or any
Subsidiary of any covenant or condition contained in any of the
Loan Documents.
Section 8.1.6. Any Borrower or any Subsidiary or any
Guarantor shall (i) have an order for relief entered with respect
to it under the Federal bankruptcy laws as now or hereafter in
effect, (ii) make an assignment for the benefit of creditors,
(iii) apply for, seek, consent to, or acquiesce in, the
appointment of a receiver, custodian, trustee, examiner,
liquidator or similar official for it or any Substantial Portion
of its Property, (iv) institute any proceeding seeking an order
for relief under the Federal bankruptcy laws as now or hereafter
in effect or seeking to adjudicate it a bankrupt or insolvent, or
seeking dissolution, winding up, liquidation, reorganization,
arrangement, adjustment or composition of it or its debts under
any law relating to bankruptcy, insolvency or reorganization or
relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed
against it, (v) consent to or acquiesce in any such proceeding
against it, (vi) not pay, or admit in writing its inability to
pay, its debts generally as they become due, (vii) take any
corporate or partnership or company action to authorize or effect
any of the foregoing actions set forth in this Section 8.1.6, or
(viii) fail to contest in good faith any appointment or
proceeding described in Section 8.1.7.
Section 8.1.7. Without the application, approval or
consent of any Borrower or any Subsidiary, or any Guarantor, a
receiver, trustee, examiner, liquidator or similar official shall
be appointed for a Borrower or any Subsidiary or any Guarantor
or any Substantial Portion of such Person's Property, or a
proceeding described in Section 8.1.6(iv) shall be instituted
against any Borrower or any Subsidiary or any Guarantor and such
appointment continues undischarged or such proceeding continues
undismissed or unstayed for a period of 60 consecutive days.
Section 8.1.8. Any court, government or governmental
agency shall condemn, seize or otherwise appropriate, or take
custody or control of, all or any portion of the Property of any
Borrower, any Subsidiary or any Guarantor which, when taken
together with all other Property of the Borrowers, the
Subsidiaries, and the Guarantors so condemned, seized,
appropriated, or taken custody or control of, during the
twelve-month period ending with the month in which any such
action occurs, constitutes a Substantial Portion.
Section 8.1.9. Any Borrower or any Subsidiary shall
fail within thirty (30) days to pay, bond or otherwise discharge
one or more (i) judgments or orders for the payment of money in
excess of $500,000 (or the equivalent thereof in currencies other
than Dollars) in the aggregate, or (ii) non-monetary judgments or
orders which, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect, which judgment(s),
in any such case, is/are not stayed on appeal or otherwise being
appropriately contested in good faith.
Section 8.1.10. The Unfunded Liabilities of all
Single Employer Plans shall exceed in the aggregate $100,000 or
any Reportable Event shall occur in connection with any Plan.
Section 8.1.11. Any Borrower or any other member of
the Controlled Group shall have been notified by the sponsor of a
Multiemployer Plan that it has incurred withdrawal liability to
such Multiemployer Plan in an amount which, when aggregated with
all other amounts required to be paid to Multiemployer Plans by
such Borrower or any other member of the Controlled Group as
withdrawal liability (determined as of the date of such
notification), exceeds $500,000 or requires payments exceeding $
250,000 per annum.
Section 8.1.12. Any Borrower or any other member of
the Controlled Group shall have been notified by the sponsor of a
Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of
Title IV of ERISA, if as a result of such reorganization or
termination the aggregate annual contributions of the Borrowers
and the other members of the Controlled Group (taken as a whole)
to all Multiemployer Plans which are then in reorganization or
being terminated have been or will be increased over the amounts
contributed to such Multiemployer Plans for the respective plan
years of each such Multiemployer Plan immediately preceding the
plan year in which the reorganization or termination occurs by an
amount exceeding $100,000.
Section 8.1.13. Any Borrower, any Guarantor or any
Subsidiary shall (i) be the subject of any proceeding or
investigation pertaining to the release by any Borrower, any
Guarantor, any Subsidiary or any other Person of any toxic or
hazardous waste or substance into the environment, or
(ii) violate any Environmental Law, which, in the case of an
event described in clause (i) or clause (ii), could reasonably be
expected to have a Material Adverse Effect.
Section 8.1.14. Any Change in Control shall occur.
Section 8.1.15. The occurrence of any "default" or
"event of default", as defined in any Loan Document (other than
this Agreement) or the breach of any of the terms or provisions
of any Loan Document (other than this Agreement), which default
or breach continues beyond any period of grace therein provided.
Section 8.1.16. Nonpayment by the applicable
Borrower, Guarantor or Subsidiary of any Rate Hedging Obligations
(including without limitation pursuant to a Facility Foreign
Exchange Agreement) when due or the breach by any Borrower,
Guarantor or Subsidiary of any term, provision or condition
contained in any Rate Hedging Agreement, and the expiration of
any applicable cure period.
Section 8.1.17. Any Guaranty shall fail to remain
in full force or effect or any action shall be taken to
discontinue or to assert the invalidity or unenforceability of
any Guaranty, or any Guarantor shall fail to comply with any of
the terms or provisions of any Guaranty to which it is a party,
or any Guarantor shall deny that it has any further liability
under any Guaranty to which it is a party, or shall give notice
to such effect.
Section 8.1.18. Any Security Document shall for any
reason fail to create a valid and perfected first priority
security interest in any collateral purported to be covered
thereby, except as permitted by the terms of any Security
Document, or any Security Document shall fail to remain in full
force or effect or any action shall be taken to discontinue or to
assert the invalidity or unenforceability of any Security
Document, or any Borrower or Guarantor shall fail to comply with
any of the terms or provisions of any Security Document.
It is understood and agreed by each Borrower and each
Guarantor that any of the foregoing "Events of Default" shall
constitute an Event of Default under each of the Notes, and that
such "Events of Default" are cumulative and in addition to any
defaults or events of default contained in any of the other Loan
Documents, and that in the event of any discrepancy or
inconsistency between any Event of Default hereunder and any
default or event of default contained in any other Loan Document,
the description of the Event of Default stated herein shall
control.
Section 8.2. Remedies . Upon the occurrence of an Event
of Default, Administrative Agent may, and at the direction and
election of the Required Lenders shall, acting by or through any
of its agents, trustees or other Persons, without notice (unless
expressly provided for herein), demand or presentment (including,
without limitation, notice of default, notice of intent to
accelerate or of acceleration) all of which are hereby waived,
and in addition to any other provision of this Agreement or any
other Loan Document, exercise any or all of the following rights,
remedies and recourses:
(a) Terminate the Lenders' commitment to make Advances
hereunder and declare the unpaid principal balance of each of the
Notes, the accrued and unpaid interest thereon and any other
accrued but unpaid portion of the Obligations to be immediately
due and payable, without notice (expressly including, but not
limited to, notice of default, notice of intent to accelerate or
of acceleration), except any notice that is expressly required by
the terms of this Agreement, presentment, protest, demand or
action of any nature whatsoever, each of which hereby is
expressly waived by each Borrower and Guarantor, to the extent
permitted by applicable law, whereupon the same shall become
immediately due and payable. Notwithstanding the foregoing or
anything to the contrary contained herein or in any other Loan
Document, upon the occurrence of an Event of Default described in
Section 8.1.6 or 8.1.7 by or with respect to any Borrower or any
Guarantor or any Subsidiary of AMRESCO, the Revolving Commitment
shall terminate and the entire unpaid principal balance of the
Notes, and all accrued, unpaid interest thereon, and all other
Obligations, shall automatically be accelerated and immediately
be due and payable in full, without notice (expressly including,
but not limited to, notice of default, intent to accelerate or of
acceleration), presentment, protest, demand or action of any
nature whatsoever, each of which hereby is expressly waived by
each Borrower and each Guarantor, to the extent permitted by
applicable law; provided, however, that if accelerated
automatically pursuant to this sentence, the Notes and all such
indebtedness may be reinstated at the option and upon the written
approval of the Required Lenders.
(b) Enter upon the Mortgaged Property or any other
Collateral or any part thereof and take exclusive possession
thereof and of all books, records and accounts relating thereto.
If any Borrower or any Guarantor remains in possession of all or
any part of the Collateral after an Event of Default occurs and
is continuing and without Administrative Agent's prior written
consent thereto, Administrative Agent may invoke any and all
legal remedies to dispossess such Borrower or such Guarantor,
including specifically one or more actions for declaratory or
injunctive relief, forcible entry and detainer, trespass to try
title and writ of restriction. Nothing contained in the
foregoing sentence shall, however, be construed to impose any
greater obligation or any prerequisites to acquiring possession
of the Collateral or any part thereof after an Event of Default
occurs than would have existed in the absence of such sentence.
(c) Hold, lease, manage, operate or otherwise use or
permit the use of the Mortgaged Property, the Assigned Loans and
all other Collateral, or any part thereof, either by itself or by
other Persons, in such manner, for such time and upon such other
terms as Administrative Agent may deem to be prudent and
reasonable under the circumstances (making such repairs,
alterations, additions and improvements thereto and taking any
and all other action with reference thereto, from time to time,
as Administrative Agent shall deem necessary or desirable), and
apply all proceeds from the Mortgaged Property, the Assigned
Loans and all other Collateral in connection therewith in
accordance with the provisions of Section 8.10.
(d) Sell or offer for sale the Collateral, or any part
thereof, in such portions, order and parcels as Administrative
Agent may determine, with or without having first taken
possession of same, in accordance with the provisions of the
applicable Loan Documents and applicable Legal Requirements.
(e) Make application to a court of competent
jurisdiction, as a matter of strict right and, except as
otherwise provided by applicable law, without notice to any
Borrower or Guarantor or without regard to the adequacy of the
Collateral for the payment of the Obligations, for the
appointment of a receiver of the Collateral, or any part thereof,
and, to the extent permitted by applicable law, each Borrower and
each Guarantor does hereby irrevocably consent to such
appointment. Any such receiver shall have all the usual powers
and duties of receivers in similar cases, including the full
power to rent, maintain, sell, dispose and otherwise operate the
Collateral, or any part thereof, upon such terms that may be
approved by the court, and shall apply all proceeds from such
operation of the Collateral in accordance with the provisions of
Section 8.10.
(f) Exercise any and all other rights, remedies and
recourses granted hereunder or under the other Loan Documents or
otherwise now or hereafter existing in equity, at law, by virtue
of statute or otherwise.
Section 8.3. Rights of Set-Off .
(a) In addition to the Lenders' Liens, each Borrower
and each Guarantor hereby expressly grant to the Lenders the
right of setoff against all deposits and other sums at any time
held or credited by or due from any Lender to any Borrower or any
Guarantor, in accordance with the provisions of this Section 8.3.
The rights of each Lender under this Section 8.3 are in addition
to other rights and remedies (including, without limitation,
other rights of setoff under law or equity) which such Lender may
have under law or by agreement.
(b) Upon the occurrence and during the continuance of
any Event of Default, each Lender is hereby authorized at any
time and from time to time, to the fullest extent permitted by
law, at its option, without notice or demand and without
liability, to set off and apply any and all deposits (general or
special, time or demand, provisional or final, excepting,
however, any fiduciary or escrow accounts established by any
Borrower or any Guarantor into which only funds of unrelated
third-parties are deposited, and provided that such Borrower or
such Guarantor has informed such Lender and Administrative Agent
of the nature of such accounts) at any time held, and other
indebtedness at any time owing, by any Lender to or for the
credit or the account of any Borrower or any Guarantor against
any and all of the Obligations now or hereafter existing under
this Agreement, the Notes and the other Loan Documents, in such
order and manner as such Lender may determine, subject, however,
to the agreements contained in Section 9.18, regardless of
whether such Lender shall have made any demand under this
Agreement or the Notes and although such obligations may be
unmatured.
(c) Each Borrower and each Guarantor agree, to the
fullest extent it may effectively do so under applicable law,
that each Lender and any holder of a participation in any of the
Notes (with the appropriate consent of such Lender) may exercise
rights of setoff or counterclaim and other rights with respect to
such participation as fully as if such holder of a participation
were a direct creditor of such Borrower or such Guarantor in the
amount of such participation.
Section 8.4. Remedies Cumulative, Concurrent and
Non-Exclusive . Administrative Agent and Lenders shall have all
rights, remedies and recourses granted in the Loan Documents, and
available at law or equity and the same (a) shall be cumulative
and concurrent, (b) may be pursued separately, successively or
concurrently against any Borrower or any Guarantor, or any others
obligated under any of the Notes, or against any one or more of
them, at the sole discretion of Administrative Agent and/or the
Lenders, (c) may be exercised as often as the occasion therefor
shall arise, it being agreed by each Borrower and each Guarantor
that the exercise or failure to exercise any of the same shall in
no event be construed as a waiver or release thereof or of any
other right, remedy or recourse, and (d) are intended to be, and
shall be, non-exclusive.
Section 8.5. No Conditions Precedent to Exercise Remedies
. Each Borrower, each Guarantor and each other Person hereafter
obligated for payment or fulfillment of all or any part of the
Obligations shall not, except as otherwise provided by applicable
law, be relieved of such obligation by reason of (a) the failure
of a trustee to comply with any request of any Borrower or
Guarantor or any other Person so obligated, to foreclose the
Lenders' Liens or to enforce any provisions of the Loan
Documents, (b) the release, regardless of consideration, of any
Person obligated with respect to the Obligations, or of the
Collateral or any part thereof, or the addition of any other
property to the Collateral, (c) any agreement or stipulation
between any subsequent owner of the Collateral and Administrative
Agent or any Lender extending, renewing, rearranging or in any
other way modifying the terms of the Loan Documents without first
having obtained the consent of, given notice to or paid any
consideration to such Borrower, such Guarantor or such other
Person, and in such event, each Borrower, each Guarantor and all
such other Persons shall continue to be liable to make payments
in accordance with the terms of any such extension or
modification agreement unless expressly released and discharged
in writing by the Required Lenders (or all the Lenders if
required under Section 11.3), and (d) any other act or
occurrence, save and except the complete indefeasible payment of
the Obligations. Each Borrower and each Guarantor waive any
right to require Lenders or the Administrative Agent to proceed
against any other Person, exhaust any Collateral, or pursue any
other remedy in Administrative Agent's or the Lenders' power.
All dealings between any Borrower or any Guarantor and
Administrative Agent or any Lender, whether or not resulting in
the creation of the Obligations, shall conclusively be presumed
to have been had or consummated upon reliance upon this
Agreement. Each Borrower and each Guarantor authorizes
Administrative Agent and the Lenders, without notice or demand
and without any reservation of rights against any Borrower or any
Guarantor and without affecting liability hereunder or on the
Obligations, from time to time, to (i) renew, extend for any
period, accelerate, modify, compromise, settle, or release the
obligation of any other Person that may be obligated with respect
to any or all of the Obligations or Collateral; (ii) take and
hold any other property as collateral, other than the Collateral,
for the payment of any or all of the Obligations, and exchange,
enforce, waive, and release any or all of the Collateral or other
property; and (iii) after the occurrence of an Event of Default,
apply the Collateral or other property and direct the order or
manner of sale thereof in accordance with the terms of this
Agreement and the Security Documents.
Section 8.6. Release of and Resort to Collateral . The
release or substitution of all or any part of the Collateral,
regardless of consideration, shall not in any way impair, affect,
subordinate, or release the Lenders' Liens or their status as
first and prior Liens in and to any remaining Collateral. For
payment and performance of the Obligations, Lenders may resort to
any other security therefor held by a trustee in such order and
manner as Required Lenders may elect.
Section 8.7. Waivers . To the full extent permitted by
law, each Borrower and each Guarantor hereby irrevocably and
unconditionally waive and release (a) all benefit that might
accrue to any Borrower or any Guarantor by virtue of any present
or future law exempting the Collateral from attachment, levy or
sale on execution or providing for any appraisement, evaluation,
stay of execution, exemption from civil process, redemption or
extension of time for payment, (b) except as specifically
provided for herein, all notices of any Default or Event of
Default or of any trustee's or Lenders' election to exercise or
his or their actual exercise of any right, remedy or recourse
provided for under the Loan Documents, (c) any right to a
marshalling of assets with respect to this Agreement, the Notes
or the Facility Letters of Credit or any of the Collateral or any
Indebtedness of any Borrower or any Guarantor, or a sale in
inverse order of alienation and (d) except as specifically
provided for herein, any and all right to receive demand, grace,
notice, presentment for payment, protest, notice of intention to
accelerate the Obligations or notice of acceleration of the
Obligations.
Section 8.8. Discontinuance of Proceedings . In case
Administrative Agent shall have proceeded to invoke any right,
remedy or recourse permitted under the Loan Documents and shall
thereafter elect to discontinue or abandon same for any reason,
Administrative Agent shall have the unqualified right to do so
and, in such event, each Borrower, each Guarantor and the Lenders
shall be restored to their former positions with respect to the
Obligations, the Loan Documents, the Collateral and otherwise,
and the rights, remedies, recourses and powers of Administrative
Agent and Lenders shall continue as if same had never been
invoked.
Section 8.9. Power of Attorney . Each Borrower and each
Guarantor hereby irrevocably appoint Administrative Agent, acting
for all the Lenders, as the true and lawful attorney of such
Borrower or such Guarantor with full power of substitution for,
and on behalf of such Borrower and such Guarantor, and in its
name, upon the request and instruction of such Borrower or such
Guarantor and in any event after the occurrence of an Event of
Default (or prior to the occurrence of any Event of Default if
Administrative Agent otherwise reasonably believes it is
necessary to take such action), to take any action to preserve,
maintain, protect or enforce the rights and interests of such
Borrower or such Guarantor with respect to the Collateral,
including, without limitation, to (a) endorse any Assigned Loans
to Administrative Agent, on behalf of Lenders, or to any other
Person, (b) enforce, cure any default or otherwise act with
respect to any leases, sales contracts, management or marketing
contracts or any other agreements pertaining to or affecting any
of the Mortgaged Properties, (c) take all such action and execute
all such documents as Administrative Agent deems necessary or
desirable to operate or preserve or protect the Assigned Loans
and the collateral therefor, any Mortgaged Property or any other
Collateral, (d) ▇▇▇ for, demand or collect any sums owing to any
Borrower or any Guarantor under the Assigned Loans or under
leases or other agreements affecting any of the Mortgaged
Properties and (e) exercise rights of any Borrower or any
Guarantor under any purchase agreement related to any Assigned
Loan. The power so vested in Administrative Agent under this
Section 8.9 is one coupled with an interest and shall be
irrevocable, except by written instrument executed jointly by
each Borrower, each Guarantor and Administrative Agent and filed
for record in the Office of the County Clerk of Dallas County,
Texas. Notwithstanding the foregoing, Administrative Agent shall
be under no obligation to exercise any of the foregoing rights or
take any action necessary to preserve any right in any asset
subject to the Lenders' Liens against any other Person, and
Administrative Agent, to the extent permitted herein or by
applicable law, may exercise any of the foregoing rights without
incurring any responsibility or liability to any Borrower or any
other Person and without in any way affecting the Obligations or
any other obligations of any Borrower or any Guarantor to
Lenders. Borrowers and Guarantors, jointly and severally, agree
to reimburse Administrative Agent and Lenders upon demand for any
costs and expenses, including, without limitation, reasonable
attorneys' fees and collection costs, that Administrative Agent
or any Lender may incur while acting as the attorney-in-fact of
Borrowers and Guarantors as provided hereunder (or pursuant to
the attorney-in-fact herein created), all of which costs and
expenses shall be included in the Obligations.
Section 8.10. Application of Proceeds . All payments on
the Notes or in respect of the Facility Letters of Credit or
otherwise on the Credit Facilities received by Administrative
Agent or any Lender during the existence of an Event of Default,
and the proceeds of any sale or disposition of, and all proceeds
generated by the holding, leasing, operation or other use of, the
Collateral, or any part thereof, during the existence of an Event
of Default and upon the exercise of the Lenders' rights and
remedies hereunder or under any of the other Loan Documents,
shall be applied to the Obligations by the Administrative Agent,
the applicable trustee or the receiver, if one is appointed, to
the extent that funds are so available therefrom, as determined
by the Required Lenders (subject to Section 11.3(iv) and provided
that, as among themselves, the Administrative Agent and the
Lenders agree that any such proceeds shall be applied as
contemplated by Article IX).
ARTICLE IX
THE ADMINISTRATIVE AGENT
Section 9.1. Appointment; Nature of Relationship. Bank
of America is hereby appointed by each of the Lenders as its
contractual representative hereunder and under each other Loan
Document, and each of the Lenders irrevocably authorizes the
Administrative Agent to act as the contractual representative of
such Lender with the rights and duties expressly set forth herein
and in the other Loan Documents. The Administrative Agent agrees
to act as such contractual representative upon the express
conditions contained in this Article IX. Notwithstanding the use
of the defined term "Administrative Agent," it is expressly
understood and agreed that the Administrative Agent shall not
have any fiduciary responsibilities to any Lender by reason of
this Agreement or any other Loan Document and that the
Administrative Agent is merely acting as the contractual
representative of the Lenders with only those duties as are
expressly set forth in this Agreement and the other Loan
Documents. In its capacity as the Lenders' contractual
representative, the Administrative Agent (i) does not hereby
assume any fiduciary duties to any of the Lenders, (ii) is a
"representative" of the Lenders within the meaning of Section 9-
105 of the Uniform Commercial Code and (iii) is acting as an
independent contractor, the rights and duties of which are
limited to those expressly set forth in this Agreement and the
other Loan Documents. Each of the Lenders hereby agrees to
assert no claim against the Administrative Agent on any agency
theory or any other theory of liability for breach of fiduciary
duty, all of which claims each Lender hereby waives.
Section 9.2. Powers. The Administrative Agent shall have
and may exercise such powers under the Loan Documents as are
specifically delegated to the Administrative Agent by the terms
of each thereof, together with such powers as are reasonably
incidental thereto. The Administrative Agent shall have no
implied duties to the Lenders, or any obligation to the Lenders
to take any action thereunder except any action specifically
provided by the Loan Documents to be taken by the Administrative
Agent.
Section 9.3. General Immunity. Neither the
Administrative Agent nor any of its directors, officers, agents
or employees shall be liable to any Borrower, any Guarantor, the
Lenders or any Lender for any action taken or omitted to be taken
by it or them hereunder or under any other Loan Document or in
connection herewith or therewith except to the extent such action
or inaction is determined in a final non-appealable judgment by a
court of competent jurisdiction to have arisen from the gross
negligence or willful misconduct of such Person.
Section 9.4. No Responsibility for Loans, Recitals, etc.
Neither the Administrative Agent nor any of its directors,
officers, agents or employees shall be responsible for or have
any duty to ascertain, inquire into, or verify (a) any statement,
warranty or representation made in connection with any Loan
Document or any borrowing hereunder; (b) the performance or
observance of any of the covenants or agreements of any obligor
under any Loan Document, including, without limitation, any
agreement by an obligor to furnish information directly to each
Lender; (c) the satisfaction of any condition specified in
Article IV, except receipt of items required to be delivered
solely to the Administrative Agent; (d) the existence or possible
existence of any Default or Event of Default; (e) the validity,
enforceability, effectiveness, sufficiency or genuineness of any
Loan Document or any other instrument or writing furnished in
connection therewith; (f) the value, sufficiency, creation,
perfection or priority of any Lien in any collateral security; or
(g) the financial condition of any Borrower or Guarantor or of
any of the Borrowers' or Guarantors' respective Subsidiaries.
The Administrative Agent shall have no duty to disclose to the
Lenders information that is not required to be furnished by any
Borrower to the Administrative Agent at such time, but is
voluntarily furnished by any Borrower to the Administrative Agent
(either in its capacity as Administrative Agent or in its
individual capacity).
Section 9.5. Action on Instructions of Lenders. The
Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions
signed by the Required Lenders (unless the consent of more than
the Required Lenders is required pursuant to Section 11.3, in
which case the Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, hereunder and
under any other Loan Document in accordance with written
instructions signed by the Lenders required by such Section), and
such instructions and any action taken or failure to act pursuant
thereto shall be binding on all of the Lenders. The Lenders
hereby acknowledge that the Administrative Agent shall be under
no duty to take any discretionary action permitted to be taken by
it pursuant to the provisions of this Agreement or any other Loan
Document unless it shall be requested in writing to do so by the
Required Lenders. The Administrative Agent shall be fully
justified in failing or refusing to take any action hereunder and
under any other Loan Document unless it shall first be
indemnified to its satisfaction by the Lenders pro rata against
any and all liability, cost and expense (other than any
liability, cost or expense resulting from its gross negligence or
willful misconduct) that it may incur by reason of taking or
continuing to take any such action.
Section 9.6. Employment of Agents and Counsel. The
Administrative Agent may execute any of its duties as
Administrative Agent hereunder and under any other Loan Document
by or through employees, agents, and attorneys-in-fact and shall
not be answerable to the Lenders, except as to money or
securities received by it or its authorized agents, for the
default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Administrative Agent
shall be entitled to advice of counsel concerning the contractual
arrangement between the Administrative Agent and the Lenders and
all matters pertaining to the Administrative Agent's duties
hereunder and under any other Loan Document.
Section 9.7. Reliance on Documents; Counsel. The
Administrative Agent shall be entitled to rely upon any Note,
notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and
correct and to have been signed or sent by the proper person or
persons, and, in respect of legal matters, upon the opinion of
counsel selected by the Administrative Agent, which counsel may
be employees of the Administrative Agent.
Section 9.8. Administrative Agent's Reimbursement and
Indemnification. The Lenders agree to reimburse and indemnify
the Administrative Agent ratably in proportion to their
respective Aggregate Loan Percentages (i) for any amounts not
reimbursed by the Borrowers for which the Administrative Agent is
entitled to reimbursement by the Borrowers under the Loan
Documents, (ii) for any other expenses incurred by the
Administrative Agent on behalf of the Lenders, in connection with
the preparation, execution, delivery, administration and
enforcement of the Loan Documents (including, without limitation,
for any expenses incurred by the Administrative Agent in
connection with any dispute between the Administrative Agent and
any Lender or between two or more of the Lenders) and (iii) for
any liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of
any kind and nature whatsoever which may be imposed on, incurred
by or asserted against the Administrative Agent in any way
relating to or arising out of the Loan Documents or any other
document delivered in connection therewith or the transactions
contemplated thereby (including, without limitation, for any such
amounts incurred by or asserted against the Administrative Agent
in connection with any dispute between the Administrative Agent
and any Lender or between two or more of the Lenders), or the
enforcement of any of the terms of the Loan Documents or of any
such other documents, provided that (i) no Lender shall be liable
for any of the foregoing to the extent any of the foregoing is
found in a final non-appealable judgment by a court of competent
jurisdiction to have resulted from the gross negligence or
willful misconduct of the Administrative Agent, IT BEING
EXPRESSLY UNDERSTOOD AND AGREED THAT ADMINISTRATIVE AGENT SHALL
HAVE THE RIGHT TO BE AND SHALL BE INDEMNIFIED FOR ITS NEGLIGENCE
(SOLE, COMPARATIVE, CONTINGENT OR OTHERWISE), and (ii) any
indemnification required pursuant to Section 3.5(vii) shall,
notwithstanding the provisions of this Section 9.8, be paid by
the relevant Lender in accordance with the provisions thereof.
The obligations of the Lenders under this Section 9.8 shall
survive payment of the Obligations and termination of this
Agreement.
Section 9.9. Notice of Default. The Administrative Agent
shall not be deemed to have knowledge or notice of the occurrence
of any Default or Event of Default hereunder unless the
Administrative Agent has received written notice from a Lender or
a Borrower referring to this Agreement describing such Default or
Event of Default and stating that such notice is a "notice of
default".
Section 9.10. Rights as a Lender. In the event the
Administrative Agent is a Lender, the Administrative Agent shall
have the same rights and powers hereunder and under any other
Loan Document with respect to its Commitment and its Loans as any
Lender and may exercise the same as though it were not the
Administrative Agent, and the term "Lender" or "Lenders" shall,
at any time when the Administrative Agent is a Lender, unless the
context otherwise indicates, include the Administrative Agent in
its individual capacity. The Administrative Agent and its
Affiliates may accept deposits from, lend money to, and generally
engage in any kind of trust, debt, equity or other transaction,
in addition to those contemplated by this Agreement or any other
Loan Document, with any Borrower or any of its Subsidiaries in
which such Borrower or Subsidiary is not restricted hereby from
engaging with any other Person. The Administrative Agent, in its
individual capacity, is not obligated to remain a Lender.
Section 9.11. Lender Credit Decision. Each Lender
acknowledges that it has, independently and without reliance upon
the Administrative Agent, the Lead Arranger or any other Lender
and based on the financial statements prepared by the Borrowers
and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter
into this Agreement and the other Loan Documents. Each Lender
also acknowledges that it will, independently and without
reliance upon the Administrative Agent, the Lead Arranger or any
other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this
Agreement and the other Loan Documents.
Section 9.12. Successor Administrative Agent. The
Administrative Agent may resign at any time by giving written
notice thereof to the Lenders and AMRESCO, such resignation to be
effective upon the appointment of a successor Administrative
Agent or, if no successor Administrative Agent has been
appointed, forty-five days after the retiring Administrative
Agent gives notice of its intention to resign. The
Administrative Agent may be removed at any time with or without
cause by written notice received by the Administrative Agent from
the Required Lenders, such removal to be effective on the date
specified by the Required Lenders. Upon any such resignation or
removal, the Required Lenders shall have the right to appoint, on
behalf of the Lenders, a successor Administrative Agent. If no
successor Administrative Agent shall have been so appointed by
the Required Lenders within thirty days after the resigning
Administrative Agent's giving notice of its intention to resign,
then the resigning Administrative Agent may appoint, on behalf of
the Lenders, a successor Administrative Agent. Notwithstanding
the previous sentence, the Administrative Agent may at any time
without the consent of the Borrowers or any Lender, appoint any
of its Affiliates which is a commercial bank as a successor
Administrative Agent hereunder. If the Administrative Agent has
resigned or been removed and no successor Administrative Agent
has been appointed, the Lenders may perform all the duties of the
Administrative Agent hereunder and the Borrowers shall make all
payments in respect of the Obligations to the applicable Lender
and for all other purposes shall deal directly with the Lenders.
No successor Administrative Agent shall be deemed to be appointed
hereunder until such successor Administrative Agent has accepted
the appointment. Any such successor Administrative Agent shall
be a Lender that is a commercial bank having capital and retained
earnings of at least $100,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the resigning or removed
Administrative Agent. Upon the effectiveness of the resignation
or removal of the Administrative Agent, the resigning or removed
Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents. After
the effectiveness of the resignation or removal of an
Administrative Agent, the provisions of this Article IX shall
continue in effect for the benefit of such Administrative Agent
in respect of any actions taken or omitted to be taken by it
while it was acting as the Administrative Agent hereunder and
under the other Loan Documents. In the event that there is a
successor to the Administrative Agent by merger, or the
Administrative Agent assigns its duties and obligations to an
Affiliate pursuant to this Section 9.12, then the term "Corporate
Base Rate" as used in this Agreement shall mean the prime rate,
base rate or other analogous rate of the new Administrative
Agent.
Section 9.13. Administrative Agent's Fee. The Borrowers
agree to pay to the Administrative Agent, for its own account,
the fees agreed to by the Borrowers and the Administrative Agent
pursuant to that certain letter agreement dated November 24,
1999, or as otherwise agreed from time to time.
Section 9.14. Delegation to Affiliates. The Borrowers and
the Lenders agree that the Administrative Agent may delegate any
of its duties under this Agreement to any of its Affiliates. Any
such Affiliate (and such Affiliate's directors, officers, agents
and employees) which performs duties in connection with this
Agreement shall be entitled to the same benefits of the
indemnification, waiver and other protective provisions to which
the Administrative Agent is entitled under Article IX and
Section 11.6.
Section 9.15. Execution of Security Documents. The
Lenders hereby empower and authorize the Administrative Agent to
execute and deliver to the Borrowers and the Guarantors, or any
of them, on their behalf the Security Documents and all related
financing statements and any financing statements, agreements,
documents or instruments as shall be necessary or appropriate to
effect the purposes of the Security Documents.
Section 9.16. Collateral Releases; Lender Consents;
Amendments, etc. The Lenders hereby empower and authorize the
Administrative Agent to execute and deliver to AMRESCO, the other
Borrowers and the Guarantors, or any of them, for and on behalf
of the Lenders any and all agreements, notices, letters,
documents or instruments as shall be necessary or appropriate to
effect (a) any releases of Collateral which are permitted by the
terms hereof or of any other Loan Document or which shall
otherwise have been approved by the Required Lenders (or, if
required by the terms of Section 11.3, all of the Lenders), or
(b) any consents, approvals, waivers, amendments or supplements
relating to the Loan Documents or the Credit Facilities as
permitted to be given by Administrative Agent hereunder or under
another Loan Document, or which shall have been agreed to by the
Required Lenders (or if required by the terms of Section 11.3,
all of the Lenders), it being expressly agreed that
Administrative Agent may deliver the consent required to be
delivered by the Lenders on the Lend Lease Closing Date as a
condition to such closing, as attached as Exhibit J to the Lend
Lease Agreement, so long as the conditions set forth in
Section 5.7.5 for the Lenders' consent and the release of
Collateral for such transaction have been satisfied.
Section 9.17. Co-Agents and Arrangers. Neither any of the
Lenders identified in this Agreement as a "co-agent" (if any), or
"syndication agent" nor the Lead Arranger shall have any right,
power, obligation, liability, responsibility or duty under this
Agreement other than those applicable to all Lenders as such.
Without limiting the foregoing, none of such Lenders nor the Lead
Arranger shall have or be deemed to have a fiduciary relationship
with any Lender. Each Lender hereby makes the same
acknowledgments with respect to such Lenders as it makes with
respect to the Administrative Agent in Section 9.11.
Section 9.18. Ratable Payments. If any Lender, whether by
setoff or otherwise, has payment made to it upon its Loans (other
than payments received pursuant to Sections 3.1, 3.2, 3.4, 3.5 or
3.7) in a greater proportion than that received by any other
Lender, such Lender agrees, promptly upon demand, to purchase a
portion of the Loans held by the other Lenders so that after such
purchase each Lender will hold its ratable proportion of Loans.
If any Lender, whether in connection with setoff of amounts which
might be subject to setoff or otherwise, receives collateral or
other protection for its Obligations or such amounts which may be
subject to set off, such Lender agrees, promptly upon demand, to
take such action necessary such that all Lenders share in the
benefits of such collateral ratably in proportion to their Loans.
In case any such payment is disturbed by legal process, or
otherwise, appropriate further adjustments shall be made. If an
amount to be set off is to be applied to Indebtedness of a
Borrower to a Lender other than Indebtedness comprised of Loans
made by such Lender, such amount shall be applied ratably to such
other Indebtedness and to the Indebtedness comprised of such
Loans.
Section 9.19. Proceeds of Collateral. The Lenders agree,
among themselves, that unless an alternative order of application
among clauses (a) through (e) (treating each clause as a separate
class) is otherwise agreed to by Administrative Agent and the
Required Lenders, all monies collected or received by
Administrative Agent, after the occurrence of an Event of
Default, in respect of the Collateral or otherwise on the
Obligations, directly or indirectly, or by any other means shall
be applied (a) first to all costs of collection or maintenance of
the Collateral, (b) then to the unpaid fees and expenses
(including consultants and attorneys' fees) owing by Borrowers
hereunder, (c) then to interest on and principal of the Loans
(including without limitation all Advances and participations
with respect to Facility Letters of Credit and Facility Foreign
Currency Exchange Agreements), as recommended by Administrative
Agent and approved by the Required Lenders (except that,
notwithstanding anything herein expressed or implied to the
contrary, any amounts to be applied to interest or principal
shall in all cases, unless all of the Lenders agree otherwise, be
distributed to the Lenders pro rata based on each Lender's
Aggregate Loan Percentage), (d) then to any unreimbursed
Settlement Payments or other Rate Hedging Obligations of any FX
Lender with respect to Facility Foreign Currency Exchange
Agreements, and (e) then, only after payment in full of the
outstanding principal and interest under the Loans and the Credit
Facilities, to any other Rate Hedging Obligations owed to any
Lender or any Affiliate of a Lender under any Rate Hedging
Agreement.
Section 9.20. Non-Advancing Lenders. In the event that a
Revolving Lender shall fail or refuse to advance its Commitment
Percentage of any Advance under the Revolving Credit Facility, or
any Lender shall fail or refuse to advance its share of any
payment or reimbursement by Lenders as required hereunder,
including without limitation any amount to be funded pursuant to
Sections 2.22 or 9.8, when it is obligated to do so (such Lender,
a "non-advancing Lender"), Administrative Agent shall notify, in
the case of the failure or refusal to make an Advance under the
Revolving Credit Facility, the Revolving Lenders, and, in all
other instances, the other Lenders, and such remaining Revolving
Lenders or all other Lenders, as applicable, or any of them, may
elect, at their sole option and discretion (without any
obligation whatsoever to do so), to advance such non-advancing
Lender's portion, pro rata in accordance with the proportion that
(i) in the case of the failure or refusal to make an Advance
under the Revolving Credit Facility, the Commitment Percentage of
each Revolving Lender electing to make such advance bears to the
Commitment Percentages of all Revolving Lenders electing to make
such advance, or (ii) in all other instances, the Aggregate Loan
Percentage of each Lender electing to make such advance bears to
the Aggregate Loan Percentage of all Lenders electing to make
such advance. Upon making any such advance, and notwithstanding
anything to the contrary expressed or implied herein or in the
Notes or any other Loan Document, all subsequent payments made on
the Revolving Credit Facility, or Term Loan Facilities, as
applicable, and all proceeds realized from the sale of any
Collateral securing the Credit Facilities or from the exercise of
any right of setoff or other remedies under this Agreement or the
other Loan Documents, shall be applied, in the manner described
below, only to Revolving Lenders, or all other Lenders, as
applicable, other than the non-advancing Lender (and the
non-advancing Lender shall not be entitled to receive the same),
until the amounts advanced by such advancing Revolving Lenders,
or all other Lenders, as applicable, on behalf of the
non-advancing Lender (together with the interest earned thereon
pursuant to this Agreement and the applicable Notes), have been
repaid in full. As among Lenders other than the non-advancing
Lender, Lenders that advanced funds on behalf of the
non-advancing Lender shall receive the portion the non-advancing
Lender would have been entitled to receive had it advanced
(together with the interest earned thereon pursuant to this
Agreement and the applicable Notes), to be applied pro rata in
accordance with the amounts advanced by each such advancing
Lender, until the amounts advanced by such Lenders on behalf of
the non-advancing Lender (together with the interest earned
thereon pursuant to this Agreement and the applicable Notes),
have been repaid in full; any Revolving Lender that advanced only
on its own behalf based on its Commitment Percentage shall be
repaid based on such Revolving Loan Percentage or its Aggregate
Loan Percentage, as applicable. In addition, any Lenders that
advance funds on behalf of a non-advancing Lender pursuant to
this Section 9.20 shall (i) receive a proportionate share (based
on the amounts so advanced by such Lenders) of the amount the
non-advancing Lender would have been entitled to receive of any
distribution of any Collateral securing the Credit Facilities in
the event the same are distributed among Lenders, and (ii) have a
claim against such non-advancing Lender for the amounts so
advanced and shall be entitled to all rights and remedies at law
or in equity to recover any unpaid amounts. A non-advancing
Lender shall not be entitled to vote on any matters hereunder or
related to either or both of the Credit Facilities (and its
interest shall be excluded for purposes of determining the
requisite percentage or number of Lenders for a vote) so long as
such Lender remains a non-advancing Lender.
ARTICLE X
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
Section 10.1. Successors and Assigns. The terms and
provisions of the Loan Documents shall be binding upon and inure
to the benefit of the Borrowers, the Guarantors and the Lenders,
and their respective successors and assigns, except that (a) no
Borrower shall have the right to assign any of its rights or
obligations hereunder or under any of the other Loan Documents
without the consent of all the Lenders, and (b) any assignment by
any Lender must be made in compliance with Section 10.3. The
Administrative Agent may treat the Person which made any Loan or
which holds any Note as the owner thereof for all purposes hereof
unless and until such Person complies with Section 10.3 in the
case of an assignment thereof or, in the case of any other
transfer, a written notice of the transfer is filed with the
Administrative Agent. Any assignee or transferee of the rights
to any Loan or any Note agrees by acceptance of such transfer or
assignment to be bound by all the terms and provisions of the
Loan Documents. Any request, authority or consent of any Person,
who at the time of making such request or giving such authority
or consent is the owner of the rights to any Loan shall be
conclusive and binding on any subsequent holder, transferee or
assignee of the rights to such Loan.
Section 10.2. Participations.
Section 10.2.1. Permitted Participants; Effect. Any
Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time sell to one or more
banks or other entities ("Participants") participating interests
in any Note held by such Lender, any interest of such Lender in
Term Loan A or Term Loan B, or the Commitment Amount, if any, of
such Lender, or any other interest or obligation of such Lender
under the Loan Documents (in amounts of not less than $5,000,000,
or a lesser amount with the consent of Administrative Agent). In
the event of any such sale by a Lender of participating interests
to a Participant, such Lender's obligations under the Loan
Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of
such obligations, such Lender shall remain the owner of its
Commitment Amount, if any, interests in Term Loan A or Term Loan
B, if any, and all of its Loans, and the holder of any Note
issued to it in evidence thereof for all purposes under the Loan
Documents, all amounts payable by the Borrowers under this
Agreement shall be determined as if such Lender had not sold such
participating interests, and the Borrowers and the Administrative
Agent and other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights
and obligations under the Loan Documents.
Section 10.2.2. Voting Rights. Each Lender shall
retain the sole right to approve, without the consent of any
Participant, any amendment, modification or waiver of any
provision of the Loan Documents; provided that the agreement
between a Lender and any Participant may provide that such
Participant shall be entitled to approve only any amendments,
modifications or waivers reducing the amount of principal of or
the rate of interest payable on any Note in which such
Participant has an interest, extending any scheduled principal
payment date or the date fixed for payment of interest on any
such Note, or extending the Revolving Credit Termination Date or
the Term Loan Facilities Maturity Date, or, except for releases
expressly provided for herein, releases of all or substantially
all of the Collateral.
Section 10.2.3. Benefit of Setoff. Each Participant
shall be deemed to have the right of setoff provided in
Sections 8.3 and 9.18 in respect of its participating interest in
amounts owing under the Loan Documents to the same extent as if
the amount of its participating interest were owing directly to
it as a Lender under the Loan Documents, provided that each
Lender shall retain the right of setoff provided in Section 8.3
with respect to the amount of participating interests sold to
each Participant. The Lenders agree to share with each
Participant, and each Participant, by exercising the right of
setoff provided in Section 8.3, agrees to share with each Lender,
any amount received pursuant to the exercise of its right of
setoff, such amounts to be shared in accordance with Section 9.18
as if each Participant were a Lender.
Section 10.3. Assignments.
Section 10.3.1. Permitted Assignments. Any Lender
may, in the ordinary course of its business and in accordance
with applicable law, at any time assign to one or more banks,
financial institutions or funds, or other entities (herein, a
"Purchaser") all or any part of its rights and obligations under
the Loan Documents. Such assignment shall be substantially in
the form of Exhibit C. The consent of the Administrative Agent
(which shall not be unreasonably withheld) shall be required
prior to an assignment becoming effective with respect to (a) a
Purchaser that is not a Lender, or an Affiliate of a Lender or a
Related Fund, and (b) with respect to an assignment of all or a
portion of the Revolving Credit Facility, Term Loan A, or Term
Loan B without a corresponding assignment in the same proportion
of the assigning Lender's interest in any of the other Credit
Facilities in which it has an interest. Each such assignment
with respect to a Purchaser which is not a Lender, an Affiliate
of a Lender or a Related Fund shall (unless Administrative Agent
otherwise consents) be in an amount not less than the lesser of
(i) with respect to the Revolving Credit Facility and Term Loan
B, $5,000,000 and with respect to Term Loan A, $2,500,000 or
(ii) the remaining amount of the assigning Lender's Commitment
Amount (calculated as at the date of such assignment) with
respect to the Revolving Credit Facility, or its outstanding
Loans (in the case of Term Loan A or Term Loan B or if the
Revolving Commitment has been terminated).
Section 10.3.2. Effect; Effective Date. Upon
(a) delivery to the Administrative Agent of an assignment, and
subject to any consent required by Section 10.3.1, and
(b) payment of a $3,500 fee paid by the assigning Lender or the
Purchaser to Administrative Agent for processing such assignment
(unless such fee is waived by the Administrative Agent), together
with payment of reasonable legal fees and expenses incurred by
Administrative Agent in connection with such assignment if, and
in the amount, requested by Administrative Agent, such assignment
shall become effective on the effective date specified in such
assignment. The assignment shall contain a representation by the
Purchaser to the effect that none of the consideration used to
make its purchase of such interests in the Revolving Credit
Facility and/or either of the Term Loan Facilities, as the case
may be, under the applicable assignment agreement constitutes
"plan assets" as defined under ERISA and that the rights and
interests of the Purchaser in and under the Loan Documents will
not be "plan assets" under ERISA. On and after the effective
date of such assignment, such Purchaser shall for all purposes be
a Lender party to this Agreement and any other Loan Document
executed by or on behalf of the Lenders and shall have all the
rights and obligations of a Lender under the Loan Documents, to
the same extent as if it were an original party hereto, and no
further consent or action by Borrowers, the Lenders or the
Administrative Agent shall be required to release the transferor
Lender with respect to the portion of the Credit Facilities
assigned to such Purchaser. Upon the consummation of any
assignment to a Purchaser pursuant to this Section 10.3.2, the
transferor Lender, the Administrative Agent and the Borrowers
shall make appropriate arrangements so that replacement Notes are
issued to such transferor Lender (if applicable) and such
Purchaser, in each case in principal amounts reflecting their
respective Commitment Amounts or Term Loan A Percentage or Term
Loan B Percentage (as applicable) in Term Loan A or Term Loan B
(as applicable), as adjusted pursuant to such assignment.
Section 10.4. Dissemination of Information. Each Borrower
authorizes each Lender to disclose to any Participant or
Purchaser or any other Person acquiring an interest in the Loan
Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in such Lender's
possession concerning the creditworthiness of the Borrowers and
their Subsidiaries, including without limitation any information
contained in any Reports; provided that each Transferee and
prospective Transferee agrees to be bound by Section 11.11.
Section 10.5. Tax Treatment. If any interest in any Loan
Document is transferred to any Transferee which is organized
under the laws of any jurisdiction other than the United States
or any State thereof, the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer,
to comply with the provisions of Section 3.5(iv).
Section 10.6. Federal Reserve Bank. Notwithstanding
Section 10.1(b) or any other provision of this Agreement, any
Lender may at any time, without the consent of Administrative
Agent or any Borrower, assign and pledge all or any portion of
its Note(s) or any amount outstanding thereunder to any Federal
Reserve Bank as collateral security pursuant to Regulation A and
any Operating Circular issued by such Federal Reserve Bank, and
any Lender that is a fund that invests in bank loans may, without
the consent of the Administrative Agent or the Borrowers, pledge
all or any portion of its Note(s) to any trustee for, or any
other representative of, holders of obligations owed, or
securities issued, by such fund, as security for such obligations
or securities; provided that any foreclosure or similar action by
such trustee shall be subject to the provisions of this Article X
concerning assignments. Additionally, any Lender that is not a
fund may, with the consent of Administrative Agent, pledge all or
any portion of its Note(s) to any trustee for, or any other
representative of, holders of obligations owed by such Lender, as
security for such obligations; provided that any foreclosure or
similar action by such trustee shall be subject to the provisions
of this Article X concerning assignments. No such assignment
contemplated under this Section 10.6 shall release the assigning
Lender from its obligations hereunder.
ARTICLE XI
GENERAL PROVISIONS
Section 11.1. Survival of Representations. All
representations and warranties of the Borrowers contained in this
Agreement shall survive the making of the Loans and other
extensions of credit herein contemplated.
Section 11.2. Notices. Except as otherwise permitted by
Section 2.18 with respect to borrowing notices, all notices,
requests and other communications to any party hereunder shall be
in writing (including electronic transmission, facsimile
transmission or similar writing) and shall be given to such
party: (a) in the case of any Borrower, any Guarantor or any
other Subsidiary of AMRESCO, in care of AMRESCO, at its address
or facsimile number set forth on Schedule 1, and in the case of
Administrative Agent, at its address or facsimile number set
forth on Schedule 1, (b) in the case of any Lender, at its
address or facsimile number set forth on Schedule 1 or (c) in the
case of any party, at such other address or facsimile number as
such party may hereafter specify for the purpose by notice to the
Administrative Agent and the Borrowers in accordance with the
provisions of this Section 11.2. Each such notice, request or
other communication shall be effective (i) if given by facsimile
transmission, when transmitted to the facsimile number specified
in this Section and confirmation of receipt is received, (ii) if
given by mail, 72 hours after such communication is deposited in
the mails with first class postage prepaid, addressed as
aforesaid, or (iii) if sent by Federal Express, the express mail
service of the United States Postal Service or other equivalent
overnight or expedited delivery service, upon the earlier of
(A) actual receipt or (B) one (1) Business Day after delivery to
such overnight or expedited delivery service, delivery charges
prepaid, and properly addressed to Administrative Agent,
Borrowers, the applicable Guarantor or the applicable Lender,
unless such notice is delayed or lost by such delivery service,
in which case it shall not be deemed given until actual receipt,
or (iv) if given by any other means, when delivered (or, in the
case of electronic transmission, received) at the address
specified in this Section; provided that notices to the
Administrative Agent under Article II shall not be effective
until received. Each Borrower and each Guarantor acknowledges
and agrees that any notice required to be given, or otherwise
given, by Administrative Agent or any Lender under this Agreement
or any other Loan Document or any Legal Requirement to all or any
of the Borrowers or Guarantors, shall be deemed given to any such
Borrower or Guarantor if sent to AMRESCO (without any requirement
that any such Borrower or Guarantor be expressly referenced in
such notice) in the manner provided by this Section 11.2. Any
Borrower, the Administrative Agent and any Lender may change the
address for service of notice upon it by a notice in writing to
the other parties hereto as provided in clause (c) above.
Section 11.3. Amendments; Lender Votes and Consents.
(a) Subject to the provisions of this Section 11.3, the Required
Lenders (or the Administrative Agent acting for and on behalf of
the Lenders with the consent of the Required Lenders) and the
Borrowers (and the Guarantors if applicable) may enter into
agreements supplemental or related to this Agreement or the other
Loan Documents for the purpose of adding to or modifying any
provisions of the Loan Documents, consenting to any matter
requiring consent, or for which Borrowers request consent or
approval, hereunder, or changing in any manner the rights or
obligations of the Lenders, the Borrowers or the Guarantors
hereunder, or waiving any requirement, Default or Event of
Default hereunder; provided, however, that no such supplemental
or related agreement shall, without the consent of all of the
Lenders:
(i) Extend the Revolving Credit Termination Date,
the Term Loan Facilities Maturity Date, or the final maturity of
any Loan, or postpone or reduce the amount of any regularly
scheduled payment of principal on Term Loan A or Term Loan B or a
payment required as a result of a mandatory reduction of the
Revolving Credit Facility pursuant to Section 2.17.1, or any
other required payment of principal of any Loan, or any mandatory
payment of principal under Section 2.2, or forgive all or any
portion of the principal amount of any of the Credit Facilities,
or reduce the rate of interest or the Applicable Fee Rate, or
extend the time of payment of interest or fees on the Credit
Facilities (excluding fees payable solely to the Administrative
Agent, the Issuing Lender or an FX Lender).
(ii) Reduce the percentage specified in, or
otherwise change, the definition of Required Lenders.
(iii) Increase the amount of the Revolving
Commitment or of the Commitment Amount of any Revolving Lender
hereunder.
(iv) Change the Balancing Ratio or the manner in
which payments of principal and interest and other sums payable
for the benefit of the Lenders under the Credit Facilities are to
be allocated among the Lenders.
(v) Permit any Borrower or any Guarantor to
assign its rights or obligations under this Agreement or any
other Loan Document.
(vi) Amend this Section 11.3.
(vii) Release any Borrower or Guarantor from
its agreements and obligations hereunder or under the Notes or
the Guaranty, as applicable, or, except as provided herein or in
the Security Documents, in one transaction or series of
transactions, release all or substantially all of the Collateral.
(b) Notwithstanding the foregoing, any supplemental or
related agreement or modification hereto, or other consent,
approval or vote, relating to the Lend Lease Agreement (including
without limitation the amount and timing of the Lend Lease
Required Payment), to the extent requiring the consent or
approval of the Lenders shall require only the consent or
approval of the Required Lenders.
(c) Except as provided in this Section 11.3, or in the
case that all Lenders are specifically designated in the
applicable provisions hereof or of the other Loan Documents,
votes, approvals and consents of the Lenders shall be determined
by the Required Lenders.
(d) No amendment of any provision of this Agreement
relating to the Administrative Agent shall be effective without
the written consent of the Administrative Agent. The
Administrative Agent may waive payment of the fee required under
Section 10.3.2 without obtaining the consent of any other party
to this Agreement.
Section 11.4. Governmental Regulations. Anything contained
in this Agreement to the contrary notwithstanding, no Lender
shall be obligated to extend credit to a Borrower in violation of
any limitation or prohibition provided by any applicable statute
or regulation.
Section 11.5. Several Obligations; Benefits of this
Agreement. The respective obligations of the Lenders hereunder
are several and not joint and no Lender shall be the partner or
agent of any other (except to the extent to which the
Administrative Agent is authorized to act as such). The failure
of any Lender to perform any of its obligations hereunder shall
not relieve any other Lender from any of its obligations
hereunder. This Agreement shall not be construed so as to confer
any right or benefit upon any Person other than the parties to
this Agreement and their respective successors and assigns,
provided, however, that the parties hereto expressly agree that
the Lead Arranger shall enjoy the benefits of the provisions of
Sections 9.6, 11.10 and 9.11 to the extent specifically set forth
therein and shall have the right to enforce such provisions on
its own behalf and in its own name to the same extent as if it
were a party to this Agreement.
Section 11.6. Expenses; Indemnification. (i) THE
BORROWERS AND THE GUARANTORS SHALL REIMBURSE THE ADMINISTRATIVE
AGENT AND THE LEAD ARRANGER FOR ANY COSTS, INTERNAL CHARGES AND
OUT-OF-POCKET EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES AND
TIME CHARGES OF ATTORNEYS FOR THE ADMINISTRATIVE AGENT, WHICH
ATTORNEYS MAY BE EMPLOYEES OF THE ADMINISTRATIVE AGENT) PAID OR
INCURRED BY THE ADMINISTRATIVE AGENT OR THE LEAD ARRANGER IN
CONNECTION WITH THE PREPARATION, NEGOTIATION, EXECUTION,
DELIVERY, SYNDICATION, REVIEW, AMENDMENT, MODIFICATION, AND
ADMINISTRATION OF THE LOAN DOCUMENTS. THE BORROWERS AND THE
GUARANTORS ALSO AGREE TO REIMBURSE THE ADMINISTRATIVE AGENT, THE
LEAD ARRANGER AND THE LENDERS FOR ANY COSTS, INTERNAL CHARGES AND
OUT-OF-POCKET EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES AND
TIME CHARGES OF ATTORNEYS FOR THE ADMINISTRATIVE AGENT, THE LEAD
ARRANGER AND THE LENDERS, WHICH ATTORNEYS MAY BE EMPLOYEES OF THE
ADMINISTRATIVE AGENT, THE LEAD ARRANGER OR ANY OF THE LENDERS)
PAID OR INCURRED BY THE ADMINISTRATIVE AGENT, THE LEAD ARRANGER
OR ANY LENDER IN CONNECTION WITH THE COLLECTION AND ENFORCEMENT
OF THE LOAN DOCUMENTS. EXPENSES BEING REIMBURSED BY THE
BORROWERS UNDER THIS SECTION INCLUDE, WITHOUT LIMITATION, COSTS
AND EXPENSES INCURRED IN CONNECTION WITH THE REPORTS DESCRIBED IN
THE FOLLOWING SENTENCE. THE BORROWERS AND THE GUARANTORS
ACKNOWLEDGE THAT FROM TIME TO TIME BANK OF AMERICA MAY PREPARE
AND MAY DISTRIBUTE TO THE LENDERS (BUT SHALL HAVE NO OBLIGATION
OR DUTY TO PREPARE OR TO DISTRIBUTE TO THE LENDERS) CERTAIN AUDIT
REPORTS (THE "REPORTS") PERTAINING TO THE BORROWERS' ASSETS FOR
INTERNAL USE BY BANK OF AMERICA FROM INFORMATION FURNISHED TO IT
BY OR ON BEHALF OF THE BORROWERS, AFTER BANK OF AMERICA HAS
EXERCISED ITS RIGHTS OF INSPECTION PURSUANT TO THIS AGREEMENT.
(ii) THE BORROWERS AND THE GUARANTORS HEREBY FURTHER
AGREE TO INDEMNIFY THE ADMINISTRATIVE AGENT, THE LEAD ARRANGER
AND EACH LENDER, AND EACH OF THEIR RESPECTIVE DIRECTORS,
OFFICERS, EMPLOYEES, ATTORNEYS, AGENTS OR OTHER REPRESENTATIVES
("REPRESENTATIVES") AGAINST ALL LOSSES, CLAIMS, DAMAGES,
PENALTIES, JUDGMENTS, LIABILITIES AND EXPENSES (INCLUDING,
WITHOUT LIMITATION, ALL EXPENSES OF LITIGATION, ARBITRATION OR
MEDIATION, OR PREPARATION THEREFOR WHETHER OR NOT THE
ADMINISTRATIVE AGENT, THE LEAD ARRANGER OR ANY LENDER, OR ANY
REPRESENTATIVE IS A PARTY THERETO) WHICH ANY OF THEM MAY PAY OR
INCUR ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER
LOAN DOCUMENTS, THE TRANSACTIONS CONTEMPLATED HEREBY OR THE
DIRECT OR INDIRECT APPLICATION OR PROPOSED APPLICATION OF THE
PROCEEDS OF ANY LOAN OR OTHER EXTENSION OF CREDIT HEREUNDER
EXCEPT TO THE EXTENT THAT THEY ARE DETERMINED IN A FINAL NON-
APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE
RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE
PARTY SEEKING INDEMNIFICATION, IT BEING THE INTENTION HEREBY THAT
ADMINISTRATIVE AGENT, LEAD ARRANGER, AND EACH LENDER, AND THEIR
RESPECTIVE REPRESENTATIVES SHALL BE INDEMNIFIED FOR THE
CONSEQUENCES OF ITS NEGLIGENCE (SOLE, CONTRIBUTORY, CONTINGENT
OR OTHERWISE), WHETHER IN WHOLE OR IN PART. THE OBLIGATIONS OF
THE BORROWERS AND THE GUARANTORS UNDER THIS SECTION 11.6 SHALL
SURVIVE THE TERMINATION OF THIS AGREEMENT.
Section 11.7. Usury Savings Clause . It is expressly
stipulated and agreed to be the intent of Administrative Agent,
each Lender, each Borrower and each Guarantor at all times to
comply with the applicable law governing the maximum rate or
amount of interest payable on or in connection with the Notes,
the Loans and the Facility Letters of Credit. If the applicable
law is ever judicially interpreted so as to render usurious any
amount called for hereunder, under the Notes or under any of the
other Loan Documents, or contracted for, charged, taken, reserved
or received with respect to any of the Notes or the Obligations
or the Facility Letters of Credit, or if acceleration of the
maturity of the Notes, any prepayment by a Borrower, or any other
circumstance whatsoever, results in any Lender having been paid
any interest in excess of that permitted by applicable law, then
it is the express intent of Administrative Agent, the Lenders,
Borrowers and the Guarantors that all excess amounts theretofore
collected by Administrative Agent and/or the Lenders be credited
on the principal balance of the Notes (or, if the Notes have been
or would thereby be paid in full, refunded to AMRESCO or another
applicable Borrower), and the provisions of the Notes and the
other applicable Loan Documents immediately be deemed reformed
and the amounts thereafter collectible hereunder and thereunder
reduced, without the necessity of the execution of any new
document, so as to comply with the applicable law, but so as to
permit the recovery of the fullest amount otherwise called for
hereunder and thereunder. The right to accelerate the maturity
of the Notes does not include the right to accelerate any
interest which has not otherwise accrued on the date of such
acceleration, and Lenders do not intend to collect any unearned
interest in the event of acceleration. All sums paid or agreed
to be paid to Lenders for the use, forbearance or detention of
the indebtedness evidenced hereby or by the Notes shall, to the
extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full term of such
indebtedness until payment in full so that the rate or amount of
interest on account of such indebtedness does not exceed the
Maximum Lawful Rate or maximum amount of interest permitted under
applicable law. The term "applicable law" as used herein shall
mean the laws of the state which govern this Agreement, or any
applicable pre-emptive federal statute or other applicable United
States federal law to the extent that it permits the Lenders to
contract for, charge, take, reserve or receive a greater amount
of interest than under laws of the state which govern this
Agreement. The provisions of this Section 11.7 shall control all
agreements between Borrowers and Lenders.
Section 11.8. Accounting. Except as provided to the
contrary herein, all accounting terms used herein shall be
interpreted and all accounting determinations hereunder shall be
made in accordance with Agreement Accounting Principles (other
than the concept of the "Discontinued Operations" which shall
have the meaning set forth in Section 1.1, rather than the
meaning under Agreement Accounting Principles).
Section 11.9. Severability of Provisions. Any provision
in any Loan Document that is held to be inoperative,
unenforceable, or invalid in any jurisdiction shall, as to that
jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any
other jurisdiction, and to this end the provisions of all Loan
Documents are declared to be severable.
Section 11.10. Nonliability of Lenders. The relationship
between the Borrowers on the one hand and the Lenders and the
Administrative Agent on the other hand shall be solely that of
borrower and lender. Neither the Administrative Agent, the Lead
Arranger nor any Lender shall have any fiduciary responsibilities
to the Borrowers. Neither the Administrative Agent, the Lead
Arranger nor any Lender undertakes any responsibility to the
Borrowers to review or inform any Borrower of any matter in
connection with any phase of the Borrowers' businesses or
operations. The Borrowers agree that neither the Administrative
Agent, the Lead Arranger nor any Lender shall have liability to
any Borrower (whether sounding in tort, contract or otherwise)
for losses suffered by such Borrower in connection with, arising
out of, or in any way related to, the transactions contemplated
and the relationship established by the Loan Documents, or any
act, omission or event occurring in connection therewith, unless
it is determined in a final non-appealable judgment by a court of
competent jurisdiction that such losses resulted from the gross
negligence or willful misconduct of the party from which recovery
is sought. Neither the Administrative Agent, the Lead Arranger
nor any Lender shall have any liability with respect to, and the
Borrowers hereby waive, release and agree not to ▇▇▇ for, any
special, indirect or consequential damages suffered by any
Borrower in connection with, arising out of, or in any way
related to the Loan Documents or the transactions contemplated
thereby.
Section 11.11. Confidentiality; Non-Solicitation. Each
Lender agrees to hold any confidential information which it may
receive from any Borrower pursuant to this Agreement in
confidence, except for disclosure (a) to its Affiliates and to
other Lenders and their respective Affiliates, (b) to legal
counsel, accountants, and other professional advisors to such
Lender or to an actual or prospective Transferee, (c) to
regulatory officials, (d) to any Person as requested pursuant to
or as required by law, regulation, or legal process, (e) to any
Person in connection with any legal proceeding to which such
Lender is a party, (f) to such Lender's direct or indirect
contractual counterparties in swap agreements or to legal
counsel, accountants and other professional advisors to such
counterparties, (g) permitted by Section 11.13, and (h) to rating
agencies if requested or required by such agencies in connection
with a rating relating to the Advances hereunder. Subject to the
foregoing, each Lender covenants and agrees to preserve the
confidentiality of any data or information, financial or
otherwise, concerning any Borrower or Guarantor or any Affiliate
of a Borrower, or related to the businesses or operations of any
Borrower or Guarantor or any Affiliate of Borrower, with respect
to which any Borrower or Guarantor or any Affiliate of Borrower
has (a) an obligation of confidentiality to a third party (to the
extent such obligation has been disclosed to such Lender) or
(b) informed such Lender of the confidential nature of the
specific information, except to the extent such Lender is
required to disclose such information pursuant to any applicable
law, rule, regulation or order of any Governmental Authority;
provided that (i) any information contained in any annual report,
or any Form 10-K, Form 10-Q or Form 8-K reports (if any) which
have been delivered to the SEC, or any other annual or quarterly
reports to the stockholders of Borrower subject to the reporting
requirements of the Securities Exchange Act of 1934, as amended,
proxy material delivered to the stockholders of any Borrower or
any report delivered to the SEC, or any other information that is
in the public domain or has become publicly known, shall not in
any event be deemed confidential, and (ii) each Lender may make
any information received by it available (A) to an actual or
prospective transferee of or participant in any interest in
either of the Credit Facilities or the Notes, provided that such
transferee or participant agrees in writing to be bound by the
provisions of this Section 11.11, (B) to any accountants or other
professionals engaged by such Lender, or (C) in connection with
the enforcement of any of the Loan Documents or any litigation in
connection therewith. Additionally, each Lender covenants and
agrees to preserve the confidentiality of this Agreement and the
transactions contemplated herein, except as set forth in the
first sentence of this Section 11.11 and in (ii)(A),(B) and (C)
of the preceding sentence. Further each Lender agrees that,
during the term of the Credit Facilities, it will not use the
information provided by Borrowers or Guarantors and not otherwise
generally known or obtainable through sources other than
Borrowers or Guarantors to take any action to personally, by
telephone or mail, solicit any Account Debtor for any purpose
which is in conflict with the services and products which
Borrowers and Guarantors are providing or can provide with their
current products and services to such Account Debtor, including
to refinance loans made by Borrowers or Guarantors to such
Account Debtor, without the prior written consent of the
applicable Borrowers or Guarantors. It is understood and agreed
that all rights, title and interest in and to the list of such
Account Debtors and data relating to their mortgages are the
property of the applicable Borrowers and Guarantors, and Lenders
shall take no action to undermine these rights and benefits.
Section 11.12. Nonreliance. Each Lender hereby represents
that it is not relying on or looking to any margin stock (as
defined in Regulation U) for the repayment of the Loans provided
for herein.
Section 11.13. Disclosure. Each Borrower and each Lender
hereby (i) acknowledge and agree that (a) one or more Affiliates
of Bank of America are or may become direct or indirect equity
investors in a Borrower or any Subsidiary, (b) Bank of America is
or may become a lender to, and agent bank for, a Borrower or a
Subsidiary, and (c) Bank of America and/or its Affiliates from
time to time may hold other investments in, make other loans to
or have other relationships with a Borrower or a Subsidiary, and
(ii) waive any liability of Bank of America or such Affiliate to
any Borrower or any Lender, respectively, arising out of or
resulting from such investments, loans or relationships other
than liabilities arising out of the gross negligence or willful
misconduct of Bank of America or its Affiliates.
Section 11.14. Compliance With Credit and Underwriting
Policies. Each of the Borrowers and Guarantors shall at all
times comply with such Person's current practices and procedures
related to credit control, underwriting, due diligence,
collateral control, collection and reporting procedures as such
practices and procedures may be modified or amended from time to
time so that such practices and procedures are no less stringent
than those used by comparable companies in Borrowers' or
Guarantors' lines of business or as in effect on the date of this
Agreement. Each Borrower's and each Guarantor's chief executive
office shall at all times be as shown in the current
organizational chart and the amendment to the Security Agreement
delivered to Administrative Agent in connection with the closing
under this Agreement (unless AMRESCO has delivered prior written
notice to Administrative Agent and its counsel of a change of the
chief executive office of any Borrower or Guarantor). The
material documents and files related to the Assigned Loans
included in the Collateral shall at all times be held by a
Custodian. Borrowers and Guarantors shall maintain all files
related to the Assigned Loans included in the Collateral in a
reasonably prudent manner.
Section 11.15. Appraisals. Administrative Agent may
require, and AMRESCO or the appropriate Borrower or Guarantor, at
its sole cost and expense, shall deliver to Administrative Agent
promptly upon request therefor (provided that if no Default or
Event of Default occurs, Borrowers and Guarantors shall not be
required to pay the cost of more than one appraisal for any
particular item or portion of the Collateral in any twelve month
period), with respect to any item or portion of the Collateral
which has a cost in excess of One Hundred Thousand and No/100
Dollars ($100,000.00), an appraisal thereof. If required by
applicable regulations, Administrative Agent may order any such
appraisal directly, and Borrowers shall reimburse Administrative
Agent for the reasonable cost of such appraisal upon request by
Administrative Agent. Each such appraisal shall be in form and
substance satisfactory to Administrative Agent.
Section 11.16. Senior Indebtedness; Borrowers Subordination.
The indebtedness of Borrowers and Guarantors hereunder and under
the Notes and all of the Obligations is intended to be and shall
be senior to any subordinated indebtedness of AMRESCO and any
other Borrower and any Guarantor or any other indebtedness of any
Borrower or any Guarantor secured by a Lien on any portion of the
Collateral (the foregoing shall not in any way imply Lenders'
consent to any such subordinate debt or Liens which are not
otherwise permitted by this Agreement). The Notes and any other
amounts advanced to or on behalf of any Borrower or any other
Person pursuant to the terms of this Agreement or any other Loan
Document shall never be in a position subordinate to any
Indebtedness of any Borrower or any Guarantor owing to any other
Person, except with the knowledge and written consent of all the
Lenders. If any Borrower or any Guarantor is now or hereafter
becomes indebted to another Borrower or any other Guarantor,
(a) such indebtedness and all interest thereon shall, at all
times, be subordinate in all respects to the Obligations and to
all liens, security interests and rights now or hereafter
existing to secure the Obligations; and (b) any Borrower or any
other Guarantor holding such inter-company indebtedness shall not
be entitled after the occurrence of a Default or Event of Default
to enforce or receive payment, directly or indirectly, of any
such indebtedness until the Obligations have been fully and
finally paid and performed.
Section 11.17. Consolidated Group. The operations of
Borrowers and Guarantors require financing on a basis such that
the credit supplied can be made available from time to time to
Borrowers and Guarantors, as required for the continued
successful operation of Borrowers and Guarantors. Borrowers and
Guarantors have requested that Lenders make the Loans available
primarily for the purposes of financing the operations of
Borrowers and Guarantors. Borrowers and Guarantors expect to
derive benefit (and the boards of directors or other governing
body of each of Borrowers and Guarantors may reasonably be
expected to derive benefit), directly or indirectly, from the
Loans established by Lenders, both in their separate capacities
and as members of the group of companies, since the successful
operation and condition of each Borrower and each Guarantor is
dependent on the continued successful performance of the
functions of the group as a whole.
Section 11.18. Amendment, Renewal and Extension. Borrowers
and Guarantors acknowledge and agree that all liens and security
interests securing all amounts outstanding under the Existing
Credit Agreement and all promissory notes evidencing same are
hereby renewed and extended and continue to secure the Loans,
which refinance, renew and extend the Credit Facilities under the
Existing Credit Agreement pursuant to this Agreement, and all of
the other Obligations.
Section 11.19. Prior Understandings; No Defenses; Entire
Agreement; No Oral Agreement . This Agreement supersedes all
other prior understandings and agreements, whether written or
not, between the parties hereto relating specifically to the
transactions provided for herein. Each Borrower and each
Guarantor further confirms that neither Administrative Agent nor
any Lender has made any agreements with, or commitments or
representations to, any Borrower or any Guarantor (either in
writing or orally) other than as expressly stated herein or in
the other Loan Documents executed as of the date hereof.
THIS WRITTEN CREDIT AGREEMENT, TOGETHER WITH THE OTHER
WRITTEN LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES AS TO THE SUBJECT MATTER HEREOF AND
THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENT OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
To the fullest extent applicable, each Borrower, each Guarantor,
Administrative Agent and each Lender acknowledge and agree that
this Agreement and each of the other Loan Documents shall be
subject to Section 26.02 of the Texas Business and Commerce Code.
Section 11.20. Release of Claims. Each Borrower and each
Guarantor confirm that there are no existing defenses, claims,
counterclaims or rights of offset against Administrative Agent or
any Lender in connection with the negotiation, preparation,
execution, performance or any other matters related to this
Agreement or any of the other Loan Documents executed as of the
date hereof and any of the transactions contemplated hereby or
thereby, or in connection with the Existing Credit Agreement, AND
EACH BORROWER AND EACH GUARANTOR HEREBY EXPRESSLY RELEASE AND
DISCHARGE ADMINISTRATIVE AGENT AND EACH LENDER, AND ITS
REPRESENTATIVES, FROM ANY AND ALL SUCH CLAIMS, KNOWN OR UNKNOWN.
Section 11.21. Construction . The parties hereto
acknowledge and agree that neither this Agreement nor any other
Loan Document shall be construed more favorably in favor of one
than the other based upon which party drafted the same, it being
acknowledged that all parties hereto contributed substantially to
the negotiation and preparation of this Agreement and the other
Loan Documents.
Section 11.22. Joint and Several Obligations . The
obligations of all the Borrowers hereunder and under the Notes
and all of the other Loan Documents are expressly acknowledged
and agreed to be joint and several, and all of the obligations,
promises, agreements, covenants, waivers, consents,
representations, warranties and other provisions in this
Agreement and the other Loan Documents are made by and shall be
binding upon each and every Borrower, jointly and severally, and
their respective successors and assigns.
Section 11.23. Counterparts. This Agreement may be
executed in any number of counterparts, all of which taken
together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such
counterpart. This Agreement shall be effective when it has been
executed by the Borrowers, the Administrative Agent and the
Lenders and each party has notified the Administrative Agent by
facsimile transmission or telephone that it has taken such
action.
ARTICLE XII
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
Section 12.1. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER
THAN THOSE CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION)
SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS ( BUT
WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS OR PRINCIPLES)
OF THE STATE OF TEXAS, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS.
Section 12.2. CONSENT TO JURISDICTION. EACH BORROWER AND
EACH GUARANTOR HEREBY IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE
JURISDICTION OF ANY UNITED STATES FEDERAL OR TEXAS STATE COURT
SITTING IN DALLAS, TEXAS IN ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO ANY LOAN DOCUMENTS, AND THE BORROWERS AND THE
GUARANTORS HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF
SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT AND IRREVOCABLY WAIVE ANY OBJECTION THEY MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE
ADMINISTRATIVE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST
ANY BORROWER OR ANY GUARANTOR IN THE COURTS OF ANY OTHER
JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY BORROWER OR ANY
GUARANTOR AGAINST THE ADMINISTRATIVE AGENT OR ANY LENDER, OR ANY
OF THEIR REPRESENTATIVES, OR ANY AFFILIATE OF THE ADMINISTRATIVE
AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS
AGREEMENT ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A
COURT IN DALLAS, TEXAS.
Section 12.3. WAIVER OF JURY TRIAL. EACH BORROWER, EACH
GUARANTOR, THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY WAIVE
ANY RIGHT TO TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT,
CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH THIS AGREEMENT, THE EXISTING CREDIT AGREEMENT, ANY
OTHER LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER,
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
IN WITNESS WHEREOF, the Borrowers, the Guarantors, the
Lenders, and the Administrative Agent have executed this
Agreement as of the date first above written.
BORROWERS:
AMRESCO, INC., a Delaware corporation
By:
Name:
Title:
AFC EQUITIES INVESTORS, INC.
AFC EQUITIES, L.P.
AFC EQUITIES MANAGEMENT, INC.
AMREIT HOLDINGS, INC.
AMREIT MANAGERS G.P., INC.
AMREIT MANAGERS, L.P.
AMRESCO 1994-N2, INC.
AMRESCO ATLANTA INDUSTRIAL, INC.
AMRESCO BUILDERS GROUP, INC.
AMRESCO CAPITAL CONDUIT CORPORATION
AMRESCO CAPITAL LIMITED, INC.
AMRESCO CAPITAL, L.P.
AMRESCO CMF, INC.
AMRESCO COMMERCIAL FINANCE, INC.
AMRESCO CONSOLIDATION CORP.
AMRESCO CONSUMER ACQUISITIONS CORP.
AMRESCO CONSUMER INVESTMENTS, L.P.
AMRESCO CONSUMER RECEIVABLES CORPORATION
AMRESCO EQUITY INVESTMENTS, INC.
AMRESCO EQUITY INVESTMENTS II, INC.
AMRESCO FINANCE AMERICA CORPORATION
AMRESCO FINANCIAL I, INC.
AMRESCO FINANCIAL I, L.P.
AMRESCO FUNDING CORPORATION
AMRESCO-INSTITUTIONAL, INC.
AMRESCO INSURANCE SERVICES, INC.
AMRESCO INVESTMENTS, INC.
AMRESCO MANAGEMENT, INC.
AMRESCO-MBS I, INC.
AMRESCO MBS-II, INC.
AMRESCO MORTGAGE CAPITAL, INC.
AMRESCO MORTGAGE CAPITAL LIMITED-I, INC.
AMRESCO MORTGAGE SERVICES LIMITED, INC.
AMRESCO NEW ENGLAND, INC.
AMRESCO NEW ENGLAND II, INC.
AMRESCO NEW ENGLAND, L.P.
AMRESCO NEW ENGLAND II, L.P.
AMRESCO NEW HAMPSHIRE, INC.
AMRESCO NEW HAMPSHIRE, L.P.
AMRESCO OVERSEAS, INC.
AMRESCO PORTFOLIO INVESTMENTS, INC.
AMRESCO PRINCIPAL MANAGERS I, INC.
AMRESCO PRINCIPAL MANAGERS II, INC.
AMRESCO RECEIVABLES MANAGEMENT CORP.
AMRESCO RESIDENTIAL CAPITAL MARKETS, INC.
AMRESCO RESIDENTIAL CREDIT CORPORATION
AMRESCO RESIDENTIAL MORTGAGE CORPORATION
AMRESCO RESIDENTIAL PROPERTIES, INC.
AMRESCO SERVICES, L.P.
AMRESCO VENTURES, INC.
ASSET MANAGEMENT RESOLUTION COMPANY
BEI 1992 - N1, INC.
BEI 1993 - N3, INC.
BEI 1994 - N1, INC.
BEI MULTI-POOL, INC.
BEI PORTFOLIO INVESTMENTS, INC.
BEI PORTFOLIO MANAGERS, INC.
BEI REAL ESTATE SERVICES, INC.
BEI SANJAC, INC.
COMMONWEALTH TRUST DEED SERVICES, INC.
ENT MIDWEST, INC.
ENT NEW JERSEY, INC.
ENT SOUTHERN CALIFORNIA, INC.
EXPRESS FUNDING, INC.
FINANCE AMERICA CORPORATION
GRANITE EQUITIES, INC.
HF ACQUISITION SUB, INC.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
LIFETIME HOMES, INC.
MORTGAGE INVESTORS CORPORATION
MSPI, INC.
OAK CLIFF FINANCIAL, INC.
PRESTON HOLLOW ASSET HOLDINGS, INC.
QUALITY FUNDING, INC.
By: AMRESCO, INC., a Delaware
corporation, as agent and attorney-in-fact
By:
Name:
Title:
GUARANTORS:
AMRESCO INDEPENDENCE FUNDING, INC.
By: AMRESCO, INC., a Delaware
corporation, as agent and attorney-in-fact
By:
Name:
Title:
AMRESCO UK HOLDINGS LIMITED
By:
Name:
Title:
By:
Name:
Title:
AMRESCO JERSEY VENTURES LIMITED
By:
Name:
Title:
AMRESCO CANADA INC.
By:
Name:
Title:
AMRESCO EQUITIES CANADA INC.
By:
Name:
Title:
AMRESCO FUNDING CANADA INC.
By:
Name:
Title:
ADMINISTRATIVE AGENT:
BANK OF AMERICA, N.A., a national banking
association, as Administrative Agent for Lenders
By:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Managing Director
LENDERS:
BANK OF AMERICA, N.A., a national banking association
By:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Managing Director
CREDIT SUISSE FIRST BOSTON
By:
Name:
Title:
By:
Name:
Title:
THE BANK OF NEW YORK
By:
Name:
Title:
LASALLE BANK NATIONAL ASSOCIATION
By:
Name:
Title:
BANK ONE, TEXAS, N.A., a national banking association
By:
Name:
Title:
BANK UNITED, a federal savings bank
By:
Name:
Title:
COMERICA BANK - TEXAS, a state banking association
By:
Name:
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By:
Name:
Title:
FLEET BANK, N.A., a national banking association
By:
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION
By:
Name:
Title:
BEAR ▇▇▇▇▇▇▇ INVESTMENT PRODUCTS, INC.
By:
Name:
Title:
PRUDENTIAL SECURITIES CREDIT CORP
By:
Name:
Title:
DRESDNER BANK AG, NEW YORK & GRAND
CAYMAN BRANCHES
By:
Name:
Title:
PNC BANK, N.A.
By:
Name:
Title:
ALLSTATE LIFE INSURANCE COMPANY
By:
Name:
Title:
By:
Name:
Title:
ALLSTATE INSURANCE COMPANY
By:
Name:
Title:
By:
Name:
Title:
STRATA FUNDING LTD.
By: INVESCO Senior Secured Management, Inc., as
Sub-Managing Agent
By:
Name:
Title:
CERES FINANCE LTD.
By: INVESCO Senior Secured Management, Inc., as
Sub-Managing Agent
By:
Name:
Title:
FARALLON DEBT INVESTORS I, LLC
By:
Name:
Title:
ING BARING (U.S.) CAPITAL LLC
By:
Name:
Title:
TYLER TRADING, INC.
By:
Name:
Title:
PACIFICA PARTNERS I, L.P.
By:
Name:
Title:
FLOATING RATE PORTFOLIO
By:
Name:
Title:
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By:
Name:
Title: